India's market regulator, SEBI, has proposed a sweeping overhaul of financial advertising norms that could significantly expand the definition of a "celebrity" in the digital era. Under a draft Common Advertisement Code (CAC) released on June 23, social media influencers with more than 5 lakh followers on a single platform, along with AI-generated virtual personalities, could be subject to the same endorsement restrictions currently applicable to film stars and other public figures.
The proposal is part of a broader framework aimed at standardising advertising practices across regulated entities including stock brokers, mutual funds, investment advisers, research analysts and portfolio managers. Public comments on the draft have been invited until July 14.
SEBI's proposed definition extends beyond traditional celebrities to include influencers with large digital followings, international-level sportspersons, television hosts and anchors, as well as winners and runners-up of reality competition shows. In a notable move, the regulator has also brought AI-generated avatars into its ambit, recognising their growing ability to shape consumer behaviour and investment decisions.
If the framework is implemented, celebrities—including influencers and virtual personalities—would only be permitted to endorse the regulated entity or its brand. They would be barred from making claims, recommendations or endorsements related to specific financial products or services.
The draft code also seeks to tighten standards around financial advertising by prohibiting guaranteed-return claims, misleading comparisons, testimonials and incentives linked to trading activity or account openings. It further targets manipulative online practices such as false urgency, forced actions and subscription traps.
The proposal underscores SEBI's increasing focus on influencer-led marketing and signals a significant shift in how financial brands may engage with audiences across social media and emerging AI-powered platforms.
