FAST READ
- SEBI notified a Common Advertisement Code for the entities it regulates.
- Celebrities may endorse a brand but not a specific financial product, and the code takes effect on 8 April 2027.
- SEBI also extended the deadline for IPO issue-size revisions to 31 March 2027.
WHY IN NEWS
Finfluencers, celebrity-led advertising and misleading return claims have drawn regulatory attention to retail investor protection. A single code replaces scattered advertising norms across intermediaries and tightens how products are promoted.
TOP DATA & FACTS
- Regulator: the Securities and Exchange Board of India (SEBI), a statutory body set up under the SEBI Act, 1992.
- Scope: a Common Advertisement Code applicable across SEBI-regulated entities.
- Core rule: brand-level celebrity endorsements are permitted, endorsements of specific financial products are barred.
- Effective date: 8 April 2027.
- Related relief: the deadline for revising IPO issue size was extended to 31 March 2027.
- The code aims to protect retail investors from misleading return claims and undisclosed conflicts of interest.
PRELIMS
- SEBI was established as an administrative body in 1988 and given statutory powers by the SEBI Act, 1992.
- A prospectus or issue-size revision refers to changes to the amount a company seeks to raise in a public offer.
- Brand-level endorsement promotes the firm's identity, while product-level endorsement links the celebrity to a specific scheme, which carries higher misselling risk.
- SEBI has a quasi-legislative, quasi-executive and quasi-judicial role.
QUICK REVISION
SEBI Common Advertisement Code: brand endorsements yes, product endorsements no, effective 8 April 2027; IPO issue-size revision deadline extended to 31 March 2027. Connect to investor protection, finfluencer regulation, misselling and the SEBI Act, 1992.
PROBABLE OBJECTIVE QUESTION
Consider the following statements about the Securities and Exchange Board of India (SEBI):
- It was given statutory status through the SEBI Act, 1992.
- It performs quasi-legislative, quasi-executive and quasi-judicial functions.
- It regulates the issuance of currency notes in India. Which of the statements given above are correct?
(a) 1 and 2 only
(b) 2 and 3 only
(c) 1 and 3 only
(d) 1, 2 and 3
Answer: (a) Explanation: SEBI became a statutory body through the SEBI Act, 1992 and has quasi-legislative, executive and judicial powers. Currency notes are issued by the RBI, so statement 3 is incorrect.