The Securities and Exchange Board of India (SEBI) has introduced new rules to fight against investment scams on social media platforms like YouTube, Facebook, and Instagram. This step aims to protect investors and ensure that they get accurate and trustworthy financial information online. With a growing number of fake investment ads on social media, SEBI’s new guidelines are designed to stop fraudsters from misleading the public with false promises of guaranteed returns or fake trading tips.
What SEBI New Rules Say
SEBI has made it mandatory for all SEBI-registered brokers, financial advisors, and other intermediaries to get approval from social media companies like Google and Meta before posting any advertisement. This change will make sure that only genuine financial experts and companies can run ads online.
To verify their identity, registered intermediaries must now use their official email addresses and phone numbers that are already listed in SEBI’s database. This will help platforms like YouTube and Instagram confirm that the advertisers are legitimate before allowing them to post any financial ad.
Deadline for Compliance: April 30, 2025
SEBI has given a deadline of April 30, 2025, for all registered financial intermediaries to update their contact information with SEBI. This update is essential to help SEBI and social media platforms maintain accurate records and ensure that the verification process runs smoothly. By doing this, SEBI aims to create a more transparent advertising system that will help investors avoid scams.
Why These Changes Are Important
There has been a sharp rise in fake investment schemes promoted through social media ads in recent years. Fraudsters use these platforms to attract people by making big promises of high returns, often backed by fake reviews and fabricated success stories. Many unsuspecting investors have lost their savings after falling for these scams. SEBI’s new guidelines are expected to reduce the number of such fraudulent advertisements by making it harder for fake companies to reach people through social media.
How It Will Help Investors
This move will improve transparency and protect investors from scams by ensuring that only verified financial experts and registered companies can advertise on social media. By working closely with platforms like Google, Meta, and YouTube, SEBI is taking a proactive approach to stop false information from spreading online. This will make it easier for investors to trust the financial advice they see on social media and avoid falling for fake schemes.
SEBI’s decision to tighten rules for social media ads is seen as a positive step toward creating a safer investment environment in India. By improving the verification process and holding social media platforms accountable, SEBI is helping to reduce the risk of online fraud and protect investors from financial losses.
As the April 30, 2025, deadline approaches, financial intermediaries must update their details and follow the new rules. This will not only improve the credibility of online financial advertising but also help build investor confidence in India’s financial markets.
