SEBI Tightens Grip on Social Media Ads to Curb Investment Frauds

The Securities and Exchange Board of India (SEBI) has taken a decisive step to combat the growing menace of investment-related frauds proliferating on social media platforms. In a bid to enhance transparency and safeguard investor interests, SEBI has mandated that all registered intermediaries must obtain prior approval from social media platforms like Google and Meta before running any advertisements.

This move comes in the wake of a sharp increase in fraudulent activities observed on platforms such as YouTube, Facebook, and Instagram. Unscrupulous entities are increasingly exploiting these platforms to entice unsuspecting investors with promises of guaranteed returns, deceptive testimonials, and online trading courses, often with misleading or fabricated information.

Under the new guidelines, all SEBI-registered intermediaries will be required to register with these social media platforms using their official email IDs and mobile numbers registered with SEBI. Subsequently, these platforms will be responsible for verifying the authenticity of the intermediaries before granting them permission to post any advertisements.

To ensure smooth implementation, SEBI has set a deadline of April 30th, 2025, for all registered intermediaries to update their contact details in the SEBI database. This step is crucial to enable SEBI and social media platforms to maintain accurate records and facilitate seamless verification.

This proactive measure by SEBI is anticipated to significantly curb the rampant spread of fraudulent advertisements and enhance investor protection. By verifying the legitimacy of advertisers, social media platforms can play a pivotal role in preventing misleading information from reaching unsuspecting investors and shielding them from potential financial losses.

Also Read: Tuhin Kanta Pandey assumes Chairmanship of SEBI