SEBI mandates identity verification to curb fraudulent social media ads

The Securities and Exchange Board of India (SEBI) has introduced new guidelines requiring registered intermediaries to verify their identities before advertising on social media platforms such as Google and Meta. The move is part of efforts to enhance transparency and investor protection in the securities market.

The decision follows a rise in fraudulent activities on platforms including YouTube, Facebook, Instagram, WhatsApp, X (formerly Twitter), Telegram, and the Google Play Store. SEBI has raised concerns about scammers using these platforms to attract investors with promises of risk-free returns, misleading testimonials, and fraudulent online trading courses.

In a statement issued on Friday, SEBI said, “It has been decided in consultation with social media platform providers that all SEBI-registered intermediaries uploading or publishing advertisements on SMPPs like Google and Meta (to start with) shall be required to register on such social media platforms using their email IDs and mobile numbers registered on SEBI SI Portal.”

Under the new regulations, registered intermediaries must use contact details, including email IDs and mobile numbers, that are already listed on SEBI’s SI Portal when signing up on social media platforms. These platforms will then verify the details before allowing the entities to publish advertisements.

The regulator has been intensifying efforts to monitor digital platforms and prevent fraudulent schemes. By requiring verification for advertising, SEBI aims to limit deceptive marketing practices and protect investors from potential financial harm. The measure aligns with broader attempts to maintain integrity within the securities market and curb exploitation facilitated through online platforms.

SEBI has set a deadline of 30 April 2025 for intermediaries to update their contact information on the SEBI SI Portal. The initiative seeks to ensure that only verified entities can engage in online promotional activities.