SEBI Implements New Guidelines for Registered Intermediaries to Combat Fraudulent Activities

In an effort to tackle the rise of fraudulent activities affecting digital platforms, the Securities and Exchange Board of India (SEBI) has unveiled new guidelines requiring registered intermediaries to confirm their identities prior to advertising on social media platforms such as Google and Meta. This announcement was made on Friday, highlighting SEBI’s commitment to increasing transparency and safeguarding investors within the securities market.

This decisive action follows a significant surge in scams that have been perpetrated through platforms including YouTube, Facebook, Instagram, WhatsApp, X (formerly Twitter), Telegram, and the Google Play Store. SEBI has noted that scammers have been taking advantage of these services to attract investors with claims of guaranteed returns, misleading endorsements, and fraudulent online trading courses.

Verification Requirements for Advertisements

The regulator indicated that, “It has been decided in consultation with Social Media Platform Providers that all SEBI registered intermediaries uploading/publishing advertisements on SMPPs like Google/Meta (to start with), shall be required to register on such social media platforms using their email IDs and mobile numbers registered on SEBI SI Portal.”

The newly established rules necessitate that all registered intermediaries sign up on social media platforms using the contact information, including email IDs and mobile numbers, already lodged with SEBI’s SI Portal. Social media platforms will perform verification checks prior to allowing these entities to promote their advertisements.

Aim of the New Initiative

This initiative is designed to ensure that promotional activities online are conducted only by verified and genuine intermediaries. SEBI has outlined a deadline of April 30, 2025, for intermediaries to refresh their contact details on the SEBI SI Portal.

This action represents a part of SEBI’s broader strategy to defend investors and uphold a fair securities market. As digital platforms continue to be a primary means of reaching investors, SEBI aims to lessen misleading marketing tactics before they can inflict significant harm.

The regulatory body has been diligently enhancing its monitoring of digital platforms to foster a safer investment climate. This initiative is expected to significantly impede dishonest operators from promoting illicit schemes on major platforms.