Advertisement Code for Investment Advisers and Research Analysts

The Securities and Exchange Board of India (SEBI) has issued a circular directing Investment Advisers (IA) and Research Analysts (RA) to comply with the advertisement code for Investment Advisers (IA) and Research Analysts (RA). This circular was issued on 5th April, 2023.

This advertisement code prescribes for the following requirements:

Forms of communication

The forms of communications, to which the advertisement code shall be applicable, shall include pamphlets, circulars, brochures, notices, research reports or any other literature, document, information or material published, or designed for use in any publication or displays (such as newspaper, magazine, sign boards/hoardings at any location), in any electronic, wired or wireless communication (such as electronic mail, text messaging, messaging platforms

Information/disclosures in the advertisement

Some of the information/disclosures that the advertisement shall contain, includes the following:

  • Name of the IA/RA as registered with SEBI, registered office address, SEBI Registration No., logo/brand name/trade name of IA/RA, and CIN of the IA/RA, if applicable.
  • Standard warning in legible fonts (minimum 10 font size) which states “Investment in securities market are subject to market risks. Read all the related documents carefully before investing.”. No addition or deletion of words shall be made to/from the standard warning.
  • In case any specific security/securities are displayed in the advertisement as examples, disclaimer that “The securities quoted are for illustration only and are not recommendatory” should be mentioned.

Prohibitions in the advertisement

The advertisement shall not contain:

  • Anything which is prohibited for publication under the law.
  • Statements which are false, misleading, biased or deceptive, based on assumptions or projections
  • Statements which, directly or by implication or by omission, may mislead the investor
  • Extensive use of technical or legal terminology or complex language and the inclusion of excessive details which may distract the investors

Other compliances/requirements

  • Prior approval for the advertisement/material shall be obtained from SEBI recognized supervisory body (e.g. BSE Administration & Supervision Ltd. (BASL) in case of IAs) before issue.
  • In the event of suspension of any IA/RA by SEBI and/or by SEBI recognized supervisory body, the IA/RA so suspended shall not issue any advertisement either singly or jointly with any other IA/RA, during the period of suspension.
  • The IA/RA shall not engage in games, leagues, schemes, competitions etc. which may involve distribution of prize monies, medals, gifts, etc