SEBI pushes new guidelines to combat fraud on digital platforms

The Securities and Exchange Board of India (SEBI) has introduced stringent guidelines requiring registered intermediaries to verify their identities before advertising on social media platforms like Google and Meta. The market regulator's initiative, announced on Friday (March 21), aims to enhance transparency and safeguard the securities market and to protect investors from scams on digital platforms.

Tackling digital scams on social platforms

SEBI’s decision comes in response to a surge in fraudulent activities on platforms such as YouTube, Facebook, Instagram, WhatsApp, Telegram, and X (formerly Twitter). These platforms have been exploited by scammers to lure unsuspecting investors with false promises of risk-free returns, deceptive endorsements, and fake trading courses.

According to the new rules, all SEBI-registered intermediaries must register on social media platforms using contact details — including email addresses and mobile numbers — that are already recorded in SEBI’s SI Portal. These platforms will verify the credentials of intermediaries before allowing them to publish advertisements, thereby ensuring only legitimate entities can promote their services.

Mandatory compliance by April 30, 2025

To facilitate this transition, SEBI has set a compliance deadline of April 30, 2025. All intermediaries must update their contact details in the SEBI SI Portal by this date. Non-compliance may lead to restrictions on advertising activities.

SEBI’s broader vision for investor safety

The initiative is part of SEBI’s broader strategy to create a secure and fair environment for investors. With digital platforms becoming a key medium to reach potential investors, the regulator’s efforts to curb misleading advertisements are critical. By closely monitoring these platforms and collaborating with social media giants, SEBI aims to deter deceptive marketing tactics that could lead to financial losses for investors.