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Market regulator Securities and Exchange Board of India (Sebi) has announced a slew of measures to crack down on investment advisors and analysts making misleading advertisements or claims in order to solicit investments.
In a circular issued on Wednesday, Sebi prohibited the use of terms like ‘Best’, ‘No. 1’, ‘Top’, ‘leading’, and ‘one of the best amongst market leaders’, among others in any form of advertisement.
Sebi’s descriptive list of prohibitions and disclosures come amid rising cases and complaints on social media against some entities promising stellar returns and making other misleading claims and projections.
Along with a stringent list of dos and don’ts on terms and disclosures, the market watchdog has prescribed additional compliance requirements, including the need to retain the copy of advertisements for five years and refraining from reference of past performance.
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Investment advisors and research analysts have been asked to seek prior approval of the advertisement from a Sebi-recognised supervisory body before issuing it.
The registered entities have also been directed not to engage in games, leagues, competitions or schemes which involve any kind of gift, medals or prize money.
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