facebook twitter linkedin

Alerts & Updates 4th Dec 2025

SEBI proposes to regulate content posted on Social Media Platforms by SEBI Regulated Entities

Authors

Vinod JosephPartner | Mumbai
Zaynali BadamiAssociate | GIFT City

Latest Thought Leadership

Alerts & Updates 4th Dec 2025

How will the ‘cookies’ crumble under India’s new data protection law?

Read More
Newsletter/Booklets 3rd Dec 2025

Market Matters – The Antitrust Brief – November 2025

Read More
Alerts & Updates 1st Dec 2025

Dual Regulation of Dark Patterns: What Businesses Need to Know

Read More
Alerts & Updates 1st Dec 2025

SEBI (Informal Guidance) Scheme, 2025

Read More

  • The Securities and Exchange Board of India (SEBI) proposes to regulate the behaviour of entities regulated by SEBI (Regulated Entities) and their agents on social media platforms (SMP). SEBI’s initiative has been driven by a number of factors such as the proliferation of fraud related in securities market on SMPs and the need to distinguish social media content uploaded by Regulated Entities on SMPs from the contents uploaded by others. Towards this end, SEBI has published a consultation paper dated 28 November 2025 (Consultation Paper) seeking public comments on a ‘Draft Circular on Disclosure of registered name and registration by SEBI regulated entities and their agents on Social Media Platforms’ (Draft Circular), which proposes to enhance standards for Regulated Entities and their agents while uploading/publishing any video/ other content on various SMPs.

    The Draft Circular says that ‘Regulated Entities’ shall have the same meaning as defined under Chapter IIIA- Explanation 1 of Regulation 16A, of the SEBI (Intermediaries) Regulations, 2008. The aforementioned Explanation 1 states that the expression “person regulated by the Board” shall mean (a) a person registered with SEBI under section 12 of the Securities and Exchange Board of India Act, 1992 (SEBI Act), (b) an asset management company of a mutual fund registered with SEBI, (c) an investment manager of an alternative investment fund or infrastructure investment trust registered with SEBI, and (d) the manager of a real estate investment trust registered with SEBI.

    Section 12 of the SEBI Act mandates the registration of various entities such as stock-brokers, sub-brokers, share transfer agents, bankers to an issue, trustees of trust deeds, registrars to an issue, merchant bankers, underwriters, portfolio managers, investment advisers, depository participants, research analysts, mutual funds, alternative investment funds, credit rating agencies and custodians.

    The Draft Circular requires all Regulated Entities and their agents (such as mutual funds distributors, distributors of portfolio management services, etc.) to prominently disclose their registered name and registration number on the home page of their social media channels as well as alongside each of the videos/content uploaded by them so that the viewer/user is able to identify that the content uploaded on the SMP is uploaded by a Regulated Entity and/or its agent.

    Further, the Draft Circular also provides a general list of prohibitions applicable to the content that is uploaded on any SMP by a Regulated Entity or its agent. This general list prohibits Regulated Entities and their agents from making any statement that is false/misleading or contains anything that is prohibited under law such as a promise/guarantee of assured return, any statement designed to exploit the lack of experience or knowledge of investors etc. The Consultation Paper also clarifies that anything contained on these SMP(s), which is either expressly or in an implied manner, in the nature of promotion of the Regulated Entity or any product or service offered by a Regulated Entity, such contents shall be considered as an advertisement and shall be required to be in compliance with the provisions of the Advertisement Code, if any, applicable to such entity.

  • ELP Comments
    • The Draft Circular applies to not only Regulated Entities, but also their agents. The term ‘agent’ could have a very wide interpretation. For example, the employee of a Regulated Entity could be considered to be an agent of such entity. If so, these rules could apply to the social media accounts of all employees (especially senior employees) of Regulated Entities. However, in Regulation 4.1 of the Draft Circular, the term agent is illustrated by examples given in brackets, which refer to mutual fund distributors, distributors of portfolio management services etc. Thus, the regulatory intent seems to be cover entities like mutual fund distributors who are not directly regulated by SEBI but do function as an extension of a regulated entity. However, it would be helpful if the Draft Circular is modified to clarify who exactly an agent might be.
    • An interesting question that arises on account of the Draft Circular is whether any false or misleading statement that is posted on social media by a regulated entity would violate existing laws or give raise to a claim for damages under tort law? The answer to such a question can only in the affirmative. For example, under SEBI (Prohibition of Fraudulent and Unfair Trade Practices relating Securities Market) Regulations, 2003 (PFUTP Regulations), any person (including Regulated Entities) is prohibited from engaging in “manipulative fraudulent or unfair trade practices” with respect to ‘listed’ or ‘to be listed’ securities. Specifically, Regulation 4(2)(f) of the PFUTP Regulations, prohibits knowingly publishing or causing to publish any information related to securities which is not true or which he does not believe to be true. Further, Regulation 4(2)(k) of the PFUTP Regulations, prohibits disseminating information or advice through any media, whether physical or digital which the disseminator knows to be false or misleading, and which is designed or likely to be influence the decision of the investors dealing in securities
    • Though some of the prohibitions mentioned in Regulation 4.2 of the Draft Circular are already prohibited by existing laws and regulations, whilst some others are either new or expand the scope of existing laws and regulations. For example, the prohibition on ‘’any statement designed to exploit the lack of experience or knowledge of the investors’ seems to be an expansion of the prohibition on making false or misleading statements, but the blanket prohibition on using SEBI’s logo or making any reference to any SEBI office or officer in any social media post is something new.
    • Many regulators in other countries have issued guidelines and clarifications on how supervised/authorized financial firms (and, in several cases, their agents/ “finfluencers”) should behave on social media. For example, in the United Kingdom, the Financial Conduct Agency’s Finalised guidance on financial promotions on social media (FG24/1) sets out expectations for financial promotions on social media (memes, reels, streams). FG24/1 provides that promotions must be fair, clear and not misleading; firms are responsible for influencers they engage; unauthorized “finfluencer” promotions can be a criminal offence. In the USA Regulatory Notice 10-06 (2010) issued by the Financial Industry Regulatory Authority (FINRA) provides practical guidance to member firms on applying existing FINRA rules to business communications conducted via blogs, social networking sites (e.g., Facebook, Twitter, LinkedIn), and similar interactive platforms. The notice aims to balance investor protection—by ensuring communications are fair, balanced, and not misleading—with firms’ ability to leverage emerging social media technologies for legitimate business purposes. It emphasizes compliance with content standards, supervision, recordkeeping, and suitability obligations, while noting that the guidance applies only to business use.

    The Consultation Paper (with the Draft Circular enclosed) can be found here.

    We hope you have found this information useful. For any queries/clarifications please write to us at insights@elp-in.com or write to our authors:

    Vinod Joseph, Partner – Email – vinodjoseph@elp-in.com

    Zaynali Badami, Associate- Email- zaynalibadami@elp-in.com

Disclaimer: The information contained in this document is intended for informational purposes only and does not constitute legal opinion or advice. This document is not intended to address the circumstances of any individual or corporate body. Readers should not act on the information provided herein without appropriate professional advice after a thorough examination of the facts and circumstances of a situation. There can be no assurance that the judicial/quasi-judicial authorities may not take a position contrary to the views mentioned herein.

Privacy Policy

As per the rules of the Bar Council of India, lawyers and law firms are not permitted to solicit work or advertise. By clicking on the "I Agree" button, you acknowledge and confirm that you are seeking information relating to Economic Laws Practice (ELP) of your own accord and there has been no advertisement, personal communication, solicitation, invitation or any other inducement of any sort whatsoever by or on behalf of ELP or any of its members to solicit any work through this website.

I AGREE EXIT SITE