The capital markets regulator SEBI on Wednesday issued advertisement guidelines for investment adviser (IA) and research analysts (RA). The markets regulator said the advertisement should include all forms of communications, issued by or on behalf of IA/RA, which can influence investment decisions of any investor or prospective investor. These advertisement codes will be applicable to various forms of communications, including pamphlets, circulars, brochures, notices, research reports or any other literature, document, information or material published, or designed for use in any publication or displays such as newspaper, magazine. The advertisement should contain the name of IA/RA as registered with SEBI, registered office address, registration number and logo. The advertisement should have standard warning in legible fonts (minimum 10 font size) which states “Investment in securities market are subject to market risks. Read all the related documents carefully before investing.” Whenever the advertisement is being issued in a language other than English, it will be ensured that the standard warning is accurately translated in the language of the advertisement, SEBI said. As per the new code, the advertisement should not contain anything which is prohibited for publication under the law. The regulator also prohibited IA/RA from making any statements which are false, misleading, biased or deceptive, based on assumptions or projections, while issuing the advertisement. “The advertisement shall not imply any assured returns or minimum returns or target return or percentage accuracy or service provision till achievement of target returns or any other nomenclature that gives the impression to the client that the investment advice/recommendation of research report is risk-free and/or not susceptible to market risks and/or that it can generate returns with any level of assurance,” the guidelines said. The advertisement should also refrain from making any reference to past performance of the IA The entities are also prohibited from extensive use of technical or legal terminology or complex language and the inclusion of excessive details which may distract the investors. Advertisements will not include SEBI logo. The market regulator has also asked IA/RA to retain a copy of the advertisement for a period of five years. These guidelines will be applicable with effect from May 1, 2023.
