SEBI draft ad code could classify influencers with 5 lakh followers as celebrities

New Delhi: Social media influencers with more than five lakh followers on a single platform could soon be classified as celebrities under a proposed advertising framework issued by the Securities and Exchange Board of India (SEBI) on Tuesday. The proposal forms part of SEBI's consultation paper on a Common Advertisement Code (CAC) for regulated entities, including stock brokers, mutual funds, depository participants, investment advisers, research analysts, portfolio managers and online bond platform providers. The regulator has proposed replacing multiple entity-specific advertising frameworks with a single code. A key proposal is to permit celebrity endorsements at the brand or entity level across regulated entities, subject to prescribed conditions and prior approval requirements. However, celebrities would not be allowed to endorse specific financial products or services. SEBI said brand endorsements represent a general association with an entity, whereas product endorsements could influence investor decisions regarding suitability or expected outcomes. Under the draft code, a person would qualify as a celebrity if they satisfy any one of several prescribed criteria. These include individuals appearing in the top 50 rankings of a publicly available celebrity index published by a national publication of repute, lead actors in prominent films, television programmes or OTT productions, and social media influencers with more than five lakh followers or subscribers on a single social media handle. The proposal formally brings digital creators within the ambit of celebrity endorsement regulations, reflecting the growing influence of social media personalities across platforms such as Instagram, YouTube, Facebook and X. The proposed definition also covers sportspersons who have represented their country in international competitions, including the Olympic Games, Asian Games, Commonwealth Games and nationally televised sporting events such as cricket and kabaddi. Television hosts and anchors associated with programmes ranging from news broadcasts and quiz shows to entertainment and award shows would also be included if they have hosted at least one season or a minimum of ten episodes. Reality television contestants have also been brought within the proposed definition. Winners and runners-up of prominent television and OTT-based competitive programmes involving multiple elimination rounds would qualify as celebrities under the framework. SEBI has further proposed including virtual characters or avatars with human-like characteristics that are capable of influencing audiences and followers. The inclusion of AI-generated personalities marks a notable expansion of traditional celebrity definitions as virtual influencers gain prominence in advertising and marketing. The framework also gives SEBI or a recognised supervisory body the discretion to classify any individual or entity as a celebrity if it believes they can influence viewers of an advertisement. The celebrity endorsement proposal forms part of a broader effort to harmonise advertising regulations across SEBI-regulated entities. The consultation paper also proposes moving away from mandatory prior approval for most advertisements in favour of a post-issuance reporting framework, although advertisements featuring celebrities would continue to require prior approval.