SEBI Proposes Mandatory ‘Identity Tags’ And ‘Content Restrictions’ For SEBI Regulated Entities on Social Media Platform
By Anushree Rauta (Equity Partner – Media, Entertainment & Gaming Practice) and Supreme Waskar (Partner)
To curb the menace of fraud and distinguish genuine awareness / advice from unregistered “finfluencers”, Securities Exchange Board of India (SEBI) has floated a consultation paper and invited comments wrt. disclosures by all the SEBI regulated entities. The proposal will mandate that regulated entities and their agents shall prominently disclose their ‘registered name’ and ‘registration number’ not only on their social media profile / home page but also alongside every specific video or content piece uploaded.
Objective
It is important that the content published by them do not contain anything which is prohibited under law or may harm investors’ interest. It is also important that the public at large is able to identify whether the content uploaded on SMPs is uploaded by SEBI regulated entities and their agents.
Persons regulated by SEBI
The proposed framework applies to all ‘persons regulated by SEBI’. The definition of persons regulated by SEBI is broad and covers the entire ecosystem of intermediaries including, but not limited to:
- All intermediaries registered with SEBI under section 12 of the SEBI Act, 1992;
- Asset management companies of mutual funds registered with SEBI;
- Investment managers of alternative investment funds or infrastructure investment trusts;
- Managers of real estate investment trusts registered with SEBI;
- Research analysts, investment advisers, brokers, and portfolio managers;
- Distributors and agents acting on behalf of regulated entities; and
- Any employee or representative creating social media content on the entity’s behalf
Essentially, anyone associated with SEBI-regulated products/services and engaging on social media platforms will be impacted.
Strict prohibitions on content
SEBI has outlined a specific negative list for social media content. Regulated entities must ensure, among other prohibitions, their posts do not contain:
- False or misleading claims: Any statement that is biased, deceptive, or exploits the lack of experience/knowledge of investors.
- Returns & performance: Any promise or guarantee of assured or risk-free returns (explicit or implied), or references to past performance unless specifically permitted by SEBI.
- SEBI association: Usage of the SEBI logo or references to any SEBI office/officer to lend credibility.
- Third-party links: References or links to any person who provides unregulated advice or makes implicit claims of returns
Compliance with advertisement code
Further, SEBI has clarified the “substance” of content, i.e., if a social media post, expressly or impliedly, promotes the regulated entity or its products/services, it will be treated as an advertisement. Consequently, such content must strictly comply with the existing advertisement code applicable to that entity.
Way forward
If SEBI finalises this framework, every Instagram reel, YouTube video, LinkedIn post, tweet, or podcast by a regulated entity will carry direct regulatory liability. This makes self-regulation of content on social-media a critical compliance priority going forward.
What preparatory steps should regulated entities take?
To ensure future compliance, entities should begin:
- Social Media Audit: Identify all official & employee-operated pages used for communication or investor outreach.
- Standardised Disclosure Templates: Prepare a template that requires mandatory disclosure of name + registration number of the SEBI-regulated entity for uploading content on all platforms.
- Content Governance Framework: Set up a compliance-approved checklist for every post, reel, or video. Incorporate prohibitions (no guaranteed returns, no SEBI logo, etc.).
- Pre-Approval Process: Implement a centralised review / approval workflow for all social content.
- Employee/Agent Training: Train staff, distributors, RM teams, and agents on new obligations and risks of noncompliance.
- Monitor Third-Party Associations: Review collaborations with influencers or educational channels to ensure zero regulatory risk.
- Record-Keeping: Maintain archives of published content to demonstrate compliance if required.
