In a consultation paper issued last week, the markets regulator proposed a common advertisement code for Sebi-regulated entities such as mutual funds, brokers, investment advisors, research analysts, and so on. One of the recommendations was to allow celebrity endorsements, on a pre-approved basis, for asset management companies (AMCs), a provision restricted for only industry-level advertisements at present.
The move has drawn criticism from industry executives who said celebrity-driven advertising risks encouraging investors to choose fund houses based on familiarity and star appeal, rather than investment performance, fund management capabilities or long-term track records.
