How Influencers With 5 Lakh Followers Can Be Classified As 'Celebrity' Under SEBI's Ad Code

Social media influencers with more than five lakh followers on a single platform could soon be treated as "celebrities" for financial advertisements under a new regulatory framework proposed by the Securities and Exchange Board of India (SEBI).

According to SEBI's consultation paper on the proposed Common Advertisement Code (CAC), released on June 23, the market regulator has suggested a broad definition of "celebrity" that extends beyond film stars and sports icons to include digital creators, television personalities, reality show contestants and even artificial intelligence (AI)-generated virtual influencers.

The proposal forms part of SEBI's broader effort to create a unified advertising framework for various regulated entities, including stock brokers, mutual funds, investment advisers, research analysts and portfolio managers. The regulator has sought public comments on the draft framework until July 14.

If implemented, the new advertising code could significantly alter how financial firms engage with influencers, celebrities and emerging AI-driven marketing channels while maintaining greater oversight of investor-facing communications.

Influencers, Athletes and TV Personalities Covered

As per the consultation paper issued by SEBI, an influencer with more than five lakh followers or subscribers on any social media platform, including YouTube, Instagram, Facebook, X (formerly Twitter), would qualify as a celebrity under the proposed rules.

The draft framework also covers sportspersons who have represented their country in international competitions. According to SEBI, this includes athletes who have participated in events such as the Olympic Games, Asian Games, Commonwealth Games and other internationally recognised sporting competitions, including popular televised sports such as cricket and kabaddi.

Television hosts and anchors could also fall within the definition. SEBI has proposed that individuals who have hosted or co-hosted television programmes, including quiz shows, cooking programmes, news broadcasts, comedy shows, dance competitions, singing contests and award ceremonies, for at least one season or a minimum of 10 episodes should be regarded as celebrities.

In addition, winners and runners-up of reality television and OTT-based competitive programmes featuring multiple elimination rounds would also be classified as celebrities, according to the regulator's proposal.

AI-Generated Influencers And Avatars Included

One of the more notable elements of the proposal is the inclusion of virtual personalities.

SEBI's consultation paper defines a celebrity as including "a virtual character (fictional computer ‘people’ or avatars who have the realistic characteristics, features and personalities of humans) that bears influence on their audience/followers".

The regulator has also proposed a residual provision that would allow SEBI or a recognised supervisory body to designate any individual or virtual character as a celebrity if it believes that person or entity is capable of influencing viewers of an advertisement.

The move reflects the increasing role of digital creators and AI-powered personalities in shaping consumer behaviour and online engagement.

Brand Promotion Allowed, No To Product Endorsements

Under the proposed Common Advertisement Code, celebrities would be permitted to promote only the brand or entity of a SEBI-regulated organisation and not endorse specific financial products or services.

Explaining the rationale, SEBI stated in its consultation paper: "In today’s time, a complete prohibition on celebrity endorsements may not be appropriate considering such endorsements are a legitimate and widely used means of brand-building in various industries including those in financial sector."

However, the regulator added that product-specific endorsements may influence investor decisions and create perceptions regarding the suitability or expected outcomes of a financial offering.

The proposed framework also seeks to strengthen investor protection through mandatory disclosures, risk warnings and restrictions on misleading promotional practices.

According to SEBI, advertisements would be barred from carrying guaranteed-return claims, deceptive comparisons, testimonials and incentives linked to account opening, account reactivation or increased trading activity.