CIRCULAR
SEBI/HO/MIRSD/ MIRSD-PoD-2/P/CIR/2023/51 April 05, 2023
To,
All Registered Investment Advisers
All Registered Research Analysts
Sir / Madam,
Sub: Advertisement code for Investment Advisers (IA) and Research Analysts (RA)
1. Securities and Exchange Board of India (Investment Advisers) Regulations, 2013 and
Securities and Exchange Board of India (Research Analysts) Regulations, 2014 provide
for code of conduct to be followed by IAs and RAs respectively. In order to further
strengthen the conduct of IAs and RAs, while issuing any advertisement, it is directed
that IAs/RAs shall ensure compliance with the advertisement code as prescribed below:
a. Forms of communication:
i. Advertisement shall include all forms of communications, issued by or on
behalf of IA/RA, that may influence investment decisions of any investor or
prospective investor.
ii. 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,
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social media platforms, radio, telephone, or in any other form over the internet)
or over any other audio-visual form of communication (such as television, tape
recording, video tape recordings, motion pictures) or in any other manner
whatsoever.
b. Information/disclosures in the advertisement:
The information/disclosures that the advertisement shall contain, include the
following-
i. 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.
ii. Information which is accurate, true and complete in unambiguous and concise
language.
iii. 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.
iv. In audio-visual media based advertisements, the standard warning in visual
media based advertisement and accompanying voice over reiteration shall be
audible in a clear and understandable manner. For example, in standard
warning both the visual and the voice over reiteration containing 20 words
running for at least 10 seconds may be considered as clear and
understandable.
v. Whenever the advertisement is being issued in a language other than English,
it will be ensured that the standard warning is accurately translated in the
language of the advertisement.
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vi. In case the mode of advertisement is SMS/Message/Pop-up, social media etc.
and the details such as full name, logo/brand name, full registered office
address, SEBI registration number, membership number of a SEBI recognized
supervisory body and standard disclaimer are not mentioned, then official
website hyperlink should be provided in such SMS/Message/Pop-up, etc. and
the website must contain all such details.
vii. 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.
viii. Advertisements and communications/correspondences with clients shall
include the disclaimer that “Registration granted by SEBI, membership of BASL
(in case of IAs) and certification from NISM in no way guarantee performance
of the intermediary or provide any assurance of returns to investors.”
c. Prohibitions in the advertisement:
The advertisement shall not contain:
i. Anything which is prohibited for publication under the law.
ii. Statements which are false, misleading, biased or deceptive, based on
assumptions or projections.
iii. Any misleading or deceptive testimonials.
iv. Statements which, directly or by implication or by omission, may mislead the
investor.
v. Any statement likely to be misunderstood or likely to disguise the significance
of the same or any other statement contained in the advertisement.
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vi. Any statement designed to exploit the lack of experience or knowledge of the
investors.
vii. Any statement that is exaggerated or is inconsistent with or unrelated to the
nature and risk and return profile of the product.
viii. Extensive use of technical or legal terminology or complex language and the
inclusion of excessive details which may distract the investors.
ix. Reference to any report, analysis, or service as free, unless it actually is free
and without condition or obligation.
x. Any promise or guarantee of assured or risk free return to the investors.
The advertisement shall not imply any assured returns or minimum returns or
target return or percentage accuracy or service provision till achievement of
target returns or any other nomenclature that gives the impression to the client
that the investment advice/recommendation of research report is risk-free
and/or not susceptible to market risks and/or that it can generate returns with
any level of assurance.
xi. Any statement which directly or indirectly discredits other advertisements or
intermediaries or makes unfair comparisons or ascribes any qualitative
advantage over other intermediaries directly or indirectly.
xii. Reference to past performance of the IA/RA.
xiii. Superlative terms such as “Best”, “No. 1”, Top Adviser/Research Analyst,
“Leading”, “One of the best amongst market leaders”, etc. so as to provide any
endorsement of quality or standing of the IA/RA. However, factual details of
awards received by the IA/RA from independent organizations may be
included.
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xiv. Advertisements shall not include SEBI Logo.
d. Other compliances/requirements:
i. 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.
ii. 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.
iii. The IA/RA shall not engage in games, leagues, schemes, competitions etc.
which may involve distribution of prize monies, medals, gifts, etc.
iv. These norms shall be applicable to any other investment/research/consultancy
agency associated with the IA/RA concerned and issuing advertisement
wherein the IA/RA has been named in the advertisement.
v. Copy of the advertisement shall be retained by IA/RA for a period of five years
in terms of Regulation 19(2) of the SEBI (Investment Advisers) Regulations,
2013 and Regulation 25 (2) of SEBI (Research Analysts) Regulations, 2014
respectively.
vi. Any additional guidelines as may be specified by SEBI or SEBI recognized
supervisory body from time to time.
2. The provisions of this circular shall be applicable with effect from May 01, 2023.
3. This circular is issued in exercise of powers conferred under section 11(1) of the
Securities and Exchange Board of India Act, 1992, to protect the interests of investors
in securities market and to promote the development of, and to regulate the securities
market.
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4. This circular is available on the SEBI website at www.sebi.gov.in under the category
"Legal Circulars".
Yours faithfully,
Amrita Shukla
Deputy General Manager
+91-22-26449882
E-mail: amrita@sebi.gov.in
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