India’s influencer marketing industry could soon see a major regulatory shift.
The Securities and Exchange Board of India (SEBI) has proposed a new Common Advertisement Code (CAC) that would significantly broaden the definition of a “celebrity” for advertisements related to SEBI-regulated entities. Under the draft framework, social media influencers with more than 5 lakh followers or subscribers on a single platform could be classified as celebrities.
The proposal forms part of SEBI’s efforts to create a unified advertising framework across stock brokers, mutual funds, investment advisers, research analysts, portfolio managers, depository participants and other regulated entities. The regulator released the consultation paper on June 23 and has invited public comments until July 14.
According to the draft, the celebrity category would extend beyond film stars to include sportspersons, television anchors, reality show winners, social media influencers and even virtual human-like avatars. Any influencer crossing the 5 lakh follower mark on platforms such as Instagram, YouTube, Facebook or X could fall under the proposed definition.
The move comes as financial brands increasingly rely on creators and influencers to connect with younger audiences. Over the past few years, influencer-led content has become a key marketing channel for investment platforms, brokers and wealth-tech companies.
SEBI has also proposed allowing celebrity endorsements for regulated financial entities at the brand level. However, celebrities and influencers would not be allowed to endorse specific financial products or make claims about investment schemes, returns or services. The regulator believes product-level endorsements could unduly influence investor decisions.
Any advertisement featuring celebrities would continue to require regulatory approval, even as SEBI considers simplifying approval requirements for other forms of advertising through a post-issuance reporting mechanism
The proposal is the latest step in SEBI’s broader crackdown on misleading financial promotions online. Earlier this year, the regulator revealed it had removed more than 1.2 lakh misleading posts linked to unregistered financial influencers and deployed AI-based monitoring tools to track violations across digital platforms.
