Sebi asks portfolio managers to remove exaggerated advertisements
Mumbai, Jun 17, 2025
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 market regulator Securities and Exchange Board of India (Sebi), which has asked them to remove such 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 these entities to immediately remove all such misleading advertisements and marketing materials 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 of PMS stood at around ₹37.8 trillion, with nearly 2 lakh 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 the Code of Advertisement specified in Sebi Master Circular for Portfolio Managers dated June 7, 2024,” said Sebi in the letter.
In December 2024, the market regulator formulated a Past Risk and Return Verification Agency (PaRRVA), tasked with verifying the risk-return metrics of services offered by investment advisers, research analysts (RAs), algorithmic trading platforms, and other such entities.
[The Business Standard]
