A finance creator with 2 million followers can go live tomorrow and name ten stocks to buy this week, with no registration or penalty even if half the calls are wrong.
The same creator, the moment a brokerage pays for that video instead of the creator making it on their own, has to follow rules built for film stars and cricketers.
It means mandatory pre-approval before content goes live, restrictions on what can actually be said in a paid post, which until now was only applied to film stars and cricketers fronting bank ads. This news is a direct hit to the business model of creators.
The gap SEBI is closing and the one it isn’t
Free advice stays untouched but paid advice now comes with strict new rules.
SEBI released a draft Common Advertisement Code for public consultation on 23rd June. Public comments are open until 14th July. The draft applies to ads from stockbrokers, mutual funds, investment advisers, research analysts, portfolio managers, and other regulated entities.
The biggest change is anyone with more than 500K followers on a single platform now counts as a celebrity when they promote a financial brand. That word used to mean film actors, top sportsperson, and well-known TV faces but now it includes influencers. It even includes AI-generated avatars, if SEBI decides they can influence how people behave.
SEBI has proposed giving itself the power to call any person, or any virtual character, a celebrity if it believes they carry real influence over viewers.
Why SEBI got here
SEBI’s whole job is to protect investors, especially small retail investors, from being misled into losing money. Its usual system rests on one idea that financial advice should come from a licensed source. Finfluencers don’t fit that system at all, and that gap is what SEBI has spent the last two years trying to close.
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Set up in 1988 and given legal powers under the SEBI Act of 1992, SEBI regulates stock exchanges, mutual funds, and brokerages. Registered advisors and brokers must follow disclosure rules and are held responsible if they mislead the public.
Unregistered influencers were never part of that system. Several cases pushed SEBI to act. In December 2025, Avadhut Sathe and his firm, Avadhut Sathe Trading Academy, were banned from the securities market entirely. Between 2017 and 2025, Sathe built a business selling real-time trading calls and stock tips, charging up to ₹6.75 lakh per person, all without SEBI registration, while calling it a course. SEBI ordered him to refund over ₹601 crore to investors. He was told to deposit ₹100 crore while his appeal was heard, and the Supreme Court refused to step in.
Sathe was the biggest name, but not the only one. Baap of Chart was fined ₹17.2 crore. PR Sundar was fined ₹6 crore. Different creators, same pattern: real-time trading calls sold as education, with no way for followers to tell the difference.
SEBI’s response built up in stages, not at once due to an incident.
In September 2024, it stopped registered financial firms from working with unregistered influencers. By October 2024, every regulated entity was told to end contracts with anyone giving investment advice without proper registration. In January 2025, finfluencers were banned from using live stock market data; any price they mentioned had to be at least three months old. By February 2026, the Ministry of Finance told Parliament that SEBI had flagged over 1.33 lakh misleading posts about the securities market, and was working with platforms to take them down.
Finance creator Shivam Budhiraja, as noted in a Moneycontrol report, highlighted that existing systemic delays often leave videos in limbo even after they are produced. He warned that unless SEBI increases its processing capacity, approval timelines will be stretched if a larger volume of creator campaigns is categorised under the celebrity bracket.
What celebrities can and cannot do
Under the new draft, a celebrity, whether a film star or an influencer, can promote the overall brand of a SEBI-regulated company, like a brokerage or a mutual fund house. What they cannot do is recommend its specific product or service. SEBI’s reasoning is when a popular creator tells followers to buy a specific investment product, followers may treat that as real financial advice, which is risky for younger or first-time investors.
The draft also bans ads that promise fixed returns, use misleading claims, or offer rewards just for opening or reactivating a trading account. This isn’t only about influencers. Every financial ad, celebrity-fronted or not, will have to be transparent, with no misleading comparisons and no fake testimonials.
There’s a change in process too as SEBI wants to remove prior approval for most financial ads. Instead, regulated entities would upload their ads to a central portal within 24 hours of publishing them, so SEBI checks after the fact instead of before. Ads featuring celebrities are the exception. Those still need approval before they go live.
The 2027 twist
SEBI isn’t alone in this. From 1st January 2027, RBI will hold financial institutions legally responsible for claims made by influencers promoting their products. If a product was missold, risks were hidden, or an unsuitable investment was pushed, the customer gets a full refund and compensation.
For creators, this changes who reads their scripts before they post. Brands hiring influencers will start reviewing every line more carefully, since they are the ones who will have to pay if something goes wrong.
The loophole that survives
None of this touches the finance creator who gives stock tips for free, with no brand paying them and no product being sold. SEBI can only regulate financial advertising, since that falls under its power over regulated entities and their marketing. It has no direct power over what an individual says in a video, unless money changes hands.
That is why the creator with 2 million followers, calling ten stocks on a livestream with no sponsor attached, still answers to no one. The rules being built target the paid relationship between creators and financial companies, not the advice itself. As long as that stays true, the loophole in the opening line of this piece will stay open too, no matter how many new categories SEBI adds to its celebrity list.
