Sebi asks portfolio managers to remove exaggerated advertisements

In a letter sent to the association of portfolio managers, Sebi directed them to adhere to the code of conduct

Exaggerated advertisements and claims by portfolio managers have caught the attention of the Securities and Exchange Board of India (Sebi).

 

The market regulator has asked them to remove the misleading communications immediately, citing violations of the code of conduct.

 

In a letter issued on June 10 to the Association of Portfolio Managers in India (Apmi), Sebi asked portfolio managers to refrain from making any statements regarding their investment capabilities or historical returns that may mislead investors.

 

Sebi has observed certain registered portfolio managers using superlative or unsubstantiated advertisements and claims on their websites or in public media platforms about their past performance and returns generated.

 

 

“Such practices are potentially misleading to the current as well as prospective investors by creating a false impression regarding the apparently superior returns generated by these entities,” the letter notes.

 

Sebi has asked them to immediately remove all such misleading advertisements and marketing material issued to clients.

 

The market watchdog added that the advisory sent to these managers does not preclude Sebi from initiating action against entities found to be in violation. 

 

As of March 2025, the assets under management (AUM) of portfolio managers stood at around ₹37.8 trillion with nearly 200,000 clients.

 

“Portfolio managers shall ensure that all advertisements/ statements disseminated on their respective websites or any other public media platform or promotional material issued to clients are factual, verifiable and in strict conformity with Code of Advertisement specified in the Sebi master circular for portfolio managers dated June 7, 2024,” said Sebi in the letter.

 

In December 2024, Sebi formulated a Past Risk and Return Verification Agency tasked to verify the risk-return metrics of services offered by investment advisors, research analysts, algorithmic trading platforms, and other such entities. 

Anuradha Thakur to replace Ajay Seth on Sebi board

 

Anuradha Thakur, who is going to take charge as the Secretary, Department of Economic Affairs (DEA), Ministry of Finance, upon superannuation of Ajay Seth, is set to join the board of market regulator Securities and Exchange Board of India (Sebi). The ministry issued notification on the same on June 16. Thakur will replace Seth once his tenure ends on June 30. Sebi’s board includes the chairman, whole-time members, and three part-time members each from the Finance Ministry, Ministry of Corporate Affairs, and the Reserve Bank of India.