Description

SEBI formally communicates with major social media platforms and search engines urging implementation of robust mechanisms to prevent fraudulent investment activities, aligned with IOSCO's global call to action.

Summary

SEBI has formally communicated with major social media platforms and internet search engine providers to implement robust mechanisms preventing fraudulent investment activities. This initiative supports IOSCO’s May 21, 2025 statement highlighting platform providers’ critical role in combating online harm. SEBI has called for immediate prioritization of mandatory advertiser verification for securities market advertisements and verified status labeling for registered intermediary apps in the Indian market.

Key Points

  • SEBI formally engaged with social media platforms and search engines to combat online investment fraud
  • Initiative aligns with IOSCO’s global call to action dated May 21, 2025
  • Platforms urged to implement mandatory advertiser verification ensuring only SEBI-registered entities can advertise investment products
  • Request for verified status labeling of registered intermediary apps on app stores
  • Investors advised to verify entity registration at https://www.sebi.gov.in/intermediaries.html
  • Transactions should only be conducted through authentic trading apps verified at https://investor.sebi.gov.in/Investor-support.html
  • Investors encouraged to use Validated UPI Handles (@valid UPI IDs) and SEBI Check platform

Regulatory Changes

SEBI is calling for implementation of two key mechanisms by social media and search platforms:

  1. Mandatory Advertiser Verification: Only SEBI-registered entities should be permitted to advertise investment products and services in the securities market domain

  2. Verified Status Labeling: Introduction of distinct labels for authentic, regulated trading applications on app stores to help investors differentiate from fraudulent apps

Compliance Requirements

For Social Media Platforms and Search Engines:

  • Implement verification processes for advertisers in securities market domain
  • Enable verified status labeling for SEBI-registered intermediary apps
  • Fast-track these measures specifically for the Indian market

For Investors:

Important Dates

  • November 06, 2025: Press Release No. 69/2025 issued
  • May 21, 2025: IOSCO issued statement on platform providers’ role in combating online harm
  • Reference to Press Release No. 64/2025 for Validated UPI Handles and SEBI Check platform details

Impact Assessment

Market Impact: This initiative represents a significant step toward protecting retail investors from online investment fraud, potentially reducing fraudulent activities on social media platforms and search engines. The collaboration with global securities regulator IOSCO demonstrates the international scope of this issue.

Investor Impact: Investors will benefit from enhanced safety measures when encountering investment advertisements and downloading trading applications. The verification mechanisms will help distinguish legitimate SEBI-registered entities from fraudulent operators.

Platform Impact: Social media platforms and search engines will need to implement additional verification layers for advertisers in the securities domain and create labeling systems for regulated trading apps, requiring operational and technological adjustments.

Operational Impact: SEBI-registered intermediaries may need to undergo additional verification processes with platforms to maintain their advertising presence and receive verified status labels on app stores.

Impact Justification

High-priority investor protection initiative addressing widespread online fraud, requiring immediate action from social media platforms and search engines with support from international securities regulator IOSCO