SEBI to Move Mutual Fund Advertising Into a Common Code Shared With Brokers and Advisers
SEBI has notified changes that will move mutual fund advertising rules into a Common Advertisement Code that also covers brokers, investment advisers and portfolio managers.
On 8 October 2026, the Securities and Exchange Board of India (SEBI) notified the SEBI (Mutual Funds) (Second Amendment) Regulations, 2026, under notification number SEBI/LAD-NRO/GN/2026/324. Mutual fund advertising will move out of its own schedule and into a code shared by several SEBI-regulated intermediaries. That Common Advertisement Code sits in Chapter IIID of the SEBI (Intermediaries) Regulations, 2008, and the amended mutual fund rules will point to it.
The amendment comes into force on the 180th day after publication in the Official Gazette, so it is not yet operative on the date of notification. It is the second amendment to the mutual fund regulations this year, following a first amendment on 7 July 2026. For readers who invest in mutual funds, the advertising they see from fund houses will fall under the new code once the amendment takes effect. The same code also covers several other kinds of market intermediary.
Mutual Fund Advertising Leaves the Fifth Schedule
Until now, the mutual fund regulations held their own advertising rules in a Fifth Schedule. The second amendment omits that schedule entirely. The deleted schedule set out a mutual fund-specific advertisement code, with requirements on accuracy, misleading claims and standard warning language.
Two cross-references change as a result. Regulation 28, in Chapter V on advertisement material, and regulation 81(l), in Chapter XVI, previously pointed to the Fifth Schedule. They will point to Chapter IIID of the Intermediaries Regulations, so advertisements covered by those two regulations will be governed by that chapter from the date the amendment takes effect. Until that day, the current references to the Fifth Schedule are unchanged.
The principal mutual fund regulations were notified on 15 January 2026 under SEBI/LAD-NRO/GN/2026/294. The first amendment, under SEBI/LAD-NRO/GN/2026/307, followed on 7 July 2026, and the 8 October amendment carries notification number SEBI/LAD-NRO/GN/2026/324.
One Code Across Several Kinds of Intermediary
The Common Advertisement Code applies to stock brokers, depository participants, investment advisers, research analysts, online bond platform providers, portfolio managers, and mutual funds with their asset management companies (AMCs). The code is a single advertising framework for all of these categories, so they share uniform requirements.
Alternative Investment Funds (AIFs) and their managers are not covered. AIFs cannot make public invitations to subscribe to their units, which LKS Law gives as the reason for leaving them out.
The code covers seven areas: promotional communications, mandatory disclosures, disclaimers, celebrity endorsements, prohibited advertisements, ratings and rankings, and regulatory enforcement. It also addresses misleading claims, guaranteed returns and dark patterns.
Read together, these areas set out what an entity may publish, what it must disclose and when it needs approval. Investment advisers and research analysts appear in the list alongside fund houses, so their advertising falls under the same provisions.
What an Advertisement Can and Cannot Say
SEBI's stated objective is that advertisements be fair, balanced, truthful, transparent and not misleading. They cannot promise guaranteed returns or offer risk-free assurances, and testimonials are barred.
The code also bars vague claims of high yield, high rating or high returns, and similar wording, where there is no basis for them. Risk statements are mandatory, and performance presentations must not be misleading.
Each advertisement must carry the name of the regulated entity, its SEBI registration number, its logo where applicable, and the specified disclaimers.
In character-limited formats such as SMS messages and pop-ups, the code allows a hyperlink to these details on official websites.
Regulated entities must also avoid dark patterns, as specified in the 2023 guidelines of the Central Consumer Protection Authority (CCPA).
Ratings and rankings may be used only if they come from Past Risk and Return Verification Agencies, and the methodology behind them must be explained. Rules on celebrity endorsements and ratings sit alongside these content standards in the same code, so a single advertisement may be subject to more than one set of provisions.
Celebrity Endorsements and Post-Release Reporting
Celebrities may be used to promote a brand or the regulated entity itself. They cannot endorse a specific product, scheme or service. Brand-level advertising may name a product, but it may not include any inducement or claim about that specific product, whether made directly or indirectly.
Prior approval is required only for celebrity-endorsed advertisements, and it must come from the relevant supervisory body or SEBI before issue.
General advertisements will no longer need prior approval. Instead, they will be reported after release, within three working days.
The consultation paper had proposed reporting within 24 hours of issue. The approved framework sets three working days instead.
The celebrity rules apply to every category of entity the code covers, including mutual funds and asset management companies. The code also permits brand-level celebrity promotion, a category that the consultation paper and the approved framework both address.
Mutual fund advertising will move out of its own schedule and into a code shared by several SEBI-regulated intermediaries.
From Consultation Paper to Commencement
SEBI issued a consultation paper on the proposed code on 23 June 2026. Public comments were open until 14 July 2026.
The SEBI Board approved the Common Advertisement Code on 24 September 2026. The code and the mutual fund amendment were both notified on 8 October 2026.
The Official Gazette issue carrying the amendment is dated 9 October 2026.
The amendments come into force on the 180th day from publication in the Official Gazette, not from the date of notification. CorpLawUpdates calculates that day as 7 April 2027, on a 9 October 2026 publication date. No advertisement needs to follow the new chapter before that date.
What Carries Over From the Old Schedule
The deleted Fifth Schedule set out accuracy requirements, a bar on misleading claims and standard warning language for mutual fund advertisements. The common code also contains a bar on misleading claims, and it lists guaranteed returns, risk-free assurances and testimonials among the prohibited content.
The earlier schedule was written for mutual fund advertising alone. The common code applies one set of provisions to brokers, depository participants, investment advisers, research analysts, online bond platforms, portfolio managers and fund houses.
