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Tag: sebi

  • Tata Capital Files for IPO: Tata Sons-Backed NBFC Plans Major Market Debut

    In order to acquire money through an initial public offering (IPO), Tata Capital, the main financial services provider for the Tata Group, has submitted draft documents to SEBI, the capital markets regulator. The IPO’s entire offer size is 47.58 crore shares, of which 21 crore will be issued as new shares and the remaining 26.58 crore will be sold by current owners.

    Tata Sons and IFC to Offload Shares in IPO

    In order to reduce its interest below 75%, Tata Sons intends to sell up to 23 crore shares in the offering. The sale of up to 3.58 crore shares is what the International Finance Corporation is proposing.

    The price range for the Tata Sons-backed NBFC has not yet been disclosed. On a fully diluted basis, Tata Sons now holds an 88.6% ownership in the NBFC, with the remaining 7% coming from other Tata Group firms.

    Utilization of IPO Proceeds: Lending and Expansion

    Future capital needs of the business, including further lending, will be covered by the proceeds of the new issue. Additionally, offer expenditures will be covered by a part of the new issue’s revenues. Tata Capital is the third-largest NBFC in terms of loan book size, with an overall AUM of INR 2.27 lakh crore.

    IPO Triggered by RBI Regulation for Systemically Important NBFCs

    With 1,496 locations around India, it is one of the largest and most diverse NBFCs with the quickest rate of growth. Private equity, wealth management, and the distribution of third-party goods are some of its other ventures. Tata Capital has received INR 6,000 crore in capital infusions over the past six years, with INR 2,000 crore and INR 500 crore coming in FY24 and FY23, respectively. A regulatory mandate is driving the initial public offering (IPO).

    Tata Capital must go public within three years after being designated as an upper-layer systemically important NBFC by the Reserve Bank of India in September 2022. This September marks the end of that deadline. The offering’s bookrunning lead managers include Citigroup Global Markets, BNP Paribas, and Kotak Mahindra Capital.

    IPO Momentum in India: Tech Firms Line Up for Listings in 2025

    In the first half of 2025, the IPO pace was slowed by global tensions and the tariff war that US President Donald Trump started. Because of this, in H1 2025, just two cutting-edge IT companies—ArisInfra and Ather Energy—debuted on the public market.

    Nonetheless, it is anticipated that the number of IPOs will rise significantly in the second half of the year. Wakefit, Pine Labs, Curefoods, Capillary Technologies, Shadowfax, Shiprocket, and Urban Company are among the cutting-edge tech firms that have submitted their draft papers to SEBI and are currently seeking approval to begin their public offerings.

  • SEBI Proposes Major RPT Rule Changes for Big Corporates to Ease Compliance Burden

    With a renewed emphasis on making it easier for big businesses to conduct business, the Securities and Exchange Board of India (SEBI) on 7 August recommended significant modifications to its related party transaction (RPT) system.

    A substantial revision of materiality requirements is suggested in the capital markets regulator’s consultation paper, which could reduce compliance barriers for the country’s leading listed companies by about 60%.

    Why SEBI’s Proposed RPT Changes Matter for Big Firms?

    A “scale-based threshold mechanism” is outlined in the consultation document, which is open for public comment, to decide whether RPTs are deemed material and need to be presented to shareholders for approval. For any RPT above INR 1,000 crore, or 10% of their yearly consolidated turnover, whichever is less, listed businesses are currently required to obtain shareholder approval.

    SEBI pointed out that this was burdensome for listed organisations with high turnover because it made big businesses designate a lot of large transactions that weren’t really significant as material, which resulted in a lot of paperwork.

    How the New Scale-Based Threshold System Works

    SEBI has suggested using a scale-based method in place of the “one-size-fits-all” strategy in order to address this. 10% of yearly consolidated turnover is still the barrier for businesses with a turnover of up to INR 20,000 crore. The barrier, however, is INR 2,000 crore + 5% of turnover exceeding INR 20,000 crore for enterprises with a turnover of INR 20,001–40,000 crore.

    Additionally, a threshold of INR 3,000 crore + 2.5% of turnover beyond INR 40,000 crore, up to a maximum of INR 5,000 crore, applies to enterprises with a turnover of more than INR 40,000 crore.

    According to SEBI, the scale-based threshold approach would guarantee that the threshold for materiality rises in tandem with the company’s turnover, resulting in a suitable number of related party transactions being classified as material and lowering the burden of compliance for listed entities.

    Impact: 60% Reduction in Material RPT Approvals

    When SEBI tested the new limits using recent data, it discovered that there were almost 60% fewer substantial RPTs that needed shareholder approval. SEBI addressed subsidiary transactions as well, suggesting that transactions exceeding INR 1 crore need audit committee clearance if they surpass either the new scale-based threshold for the parent company or 10% of the subsidiary’s turnover, “whichever is lower”.

    What This Means for Listed Companies and Subsidiaries

    10% of net worth or the parent company’s criteria would be used as a comparator for subsidiaries without full-year financials.” Noting that the INR 1 crore exemption from full disclosure requirements is a “minuscule amount for listed entities having high turnover,” Sebi suggested that smaller RPTs only have to give the Audit Committee or shareholders the bare minimum of information, up to 1% of turnover or INR 10 crore, whichever is less.

    SEBI Consultation Paper: Key Dates and Deadlines

    The consultation document aims to formally state that omnibus RPTs passed at an AGM will remain in effect for a maximum of 15 months, until the next AGM. The approval is good for another year for other shareholder meetings. It was suggested that directors or other key management staff of a listed company or its subsidiary (or their family members) would be the only ones eligible for exemptions from retail purchases.

    Additionally, it made clear that listed holding companies are the only ones eligible for exemptions from transactions between holding companies and subsidiaries. SEBI has set a deadline of August 25, 2025, for public feedback on these suggestions. The difficulty, according to legal experts, will be striking a balance between efficiency and adequate rigour, making sure that the compliance reset doesn’t weaken minority rights or create new opportunities for related party dealings to be opaque.

  • Jane Street Seeks More Time to Respond to SEBI’s INR 4,843 Cr Market Manipulation Charge

    Jane Street, a high-frequency trading firm based in the United States, has requested further time from the Securities and Exchange Board of India (SEBI), the Indian market regulator. Jane Street Group told the media in a statement on the evening of July 28 that it is working cooperatively with SEBI and has requested an extension to reply to the July 3 interim decision.

    SEBI had given 21 days to respond in its interim order dated July 3. It appears that the extension was requested after this deadline had passed. Jane Street did not reveal the extent of the timeframe extension it has attempted to provide in response to SEBI’s enquiries.

    Jane Street promised in the same statement that the group is dedicated to maintaining market integrity. Jane Street is dedicated to actions that preserve the integrity of India’s capital markets and support their ongoing growth, the statement added.

    INR 4,843 Crore Market Manipulation Allegation Explained

    According to the preliminary inquiry, Jane Street Group illegally gained INR 4,843.5 crore by manipulating trading on Bank Nifty and Nifty Index Options, as SEBI had claimed in its July 3 decision.

    Jane Street Group was instructed by SEBI to seize and place the purportedly unlawful proceeds in an interest-bearing escrow account with a lien in SEBI’s favour.

    SEBI’s Interim Measures and Jane Street’s Compliance

    On July 11, Jane Street complied with Sebi’s instructions regarding the impoundment of alleged unlawful gains. Later, on July 21, SEBI removed the limitations on Jane Street Group’s trading in Indian markets, provided that it refrain from manipulating the market and that exchanges keep a close watch on its transactions.

    SEBI’s Broader Crackdown on Market Manipulation

    The entities have been instructed to stop and desist from directly or indirectly engaging in any fraudulent, manipulative, or unfair trade practices, as well as from engaging in any activity that may violate current regulations, such as dealing in securities using any of the patterns mentioned or identified in the interim order, according to a statement released by Sebi on July 21. The entities have attested to their intention to adhere to this.

    Stock exchanges were instructed to continuously keep a close eye on Jane Street Group’s future transactions and holdings. Therefore, until SEBI’s investigation is finished and any related proceedings are concluded, entities must refrain from engaging in any form of manipulative behaviour, whether directly or indirectly, including dealing in securities using any of the patterns mentioned or identified in the interim order.

    Jane Street Group had previously refuted Sebi’s accusations and said that the Indian capital market watchdog had misinterpreted its trading approach.

  • Jane Street Returns to Indian Markets After SEBI Ban, Escrow Deposit of INR 4,800 Cr

    After being accused by the market watchdog of manipulating index prices to increase profits at the expense of small investors, Jane Street, a US-based trading firm, found itself at the focus of a regulatory maelstrom in India.

    SEBI Accuses Jane Street of Index Price Manipulation

    The company was temporarily prohibited from engaging in its securities markets by the Securities and Exchange Board of India (SEBI) on July 3. According to the regulator, Jane Street engaged in a concerted trading strategy that manipulated prices in the Bank Nifty index of India, deceiving investors and making money off of the ensuing volatility.

    Jane Street, which has denied any wrongdoing, is now contesting the ruling. It has returned to trading in the Indian market and placed about INR 4,800 crore, or around $560 million, into an escrow account. A discussion between legal arbitrage and criminal market manipulation has been sparked by the case, which has left some institutional investors uneasy and may possibly act as a bigger wake-up call for India’s financial industry.

    Jane Street’s Global Operations and Indian Footprint

    Jane Street is a global quantitative trading company that trades quickly and across markets using mathematical models and algorithms. It is one of the biggest companies on Wall Street, with operations in over 45 countries and more than 3,000 people.

    The company was a major player in the Indian cash market, where investors purchase and sell real shares, as well as the derivatives market, where traders wager on future price changes using tools like options and futures.

    What Is Arbitrage? And Why SEBI Objects

    A legitimate trading tactic that capitalises on price variations across markets is arbitrage. This implies that a trader can purchase low in one market and sell high in another if a stock is selling at slightly different prices on two exchanges. Arbitrage between the cash and derivatives markets is common in India, where traders can buy and sell related assets at the same time to lock in modest, low-risk gains. In India, arbitrage is permitted as long as the trades are founded on current inefficiencies and don’t aim to inflate prices.

    According to V. Raghunathan, a former member of the SEBI main market board, arbitrage may even be advantageous since it can help align prices, increasing market efficiency, as he told CNBC. It is against the law to manipulate the market. It entails purposefully manipulating prices or fabricating a false sense of market activity.

    This could involve strategies like manipulating pricing without a sound economic justification, boosting demand artificially, or making trades only to affect market results.

    How ‘Marking the Close’ Triggered SEBI Action?

    SEBI claims that Jane Street implemented a coordinated trading strategy in the Bank Nifty index by using a number of organisations. According to the market regulator, the index price increased as a result of one company purchasing substantial amounts of banking stocks early in the morning.

    In anticipation of a decline in the index, a different business simultaneously entered bets in the futures market. Jane Street is accused of selling off the previous stock purchases in huge quantities around the end of the trading day, especially on expiry days when derivative contracts are paid, which caused the index to decline.

    According to Sebi, the firm’s wagers on declining prices were more profitable as a result of this price decline. “Marking the close” is the term for this tactic, which is deemed manipulative if it entails purposefully affecting prices in the last minutes of trading.

    According to Sebi, Jane Street’s conduct produced a false and deceptive impression of market activity, which led to distorted trading levels and losses for individual investors. Jane Street has called its activities “basic index arbitrage” and denied any manipulation.

  • WeWork India Gets SEBI Nod for IPO, Set to Raise Funds via Offer for Sale

    According to the Securities and Exchange Board of India’s (SEBI) most recent processing status statement from July 2025, WeWork India Management Limited (WeWork India), one of the country’s top operators of flexible workspaces, has been approved by SEBI for its initial public offering (IPO).

    Up to 43,753,952 equity shares will be offered for sale (OFS) as part of the IPO; no new shares will be issued. According to the document, the OFS comprises up to 33,458,659 equity shares offered by the Promoter Selling Shareholder Embassy Buildcon LLP and up to 10,295,293 equity shares offered by the Investor Selling Shareholder 1 Ariel Way Tenant Limited.

    The issue’s Book Running Lead Managers are a group of top investment banks, including JM Financial Limited, ICICI Securities Limited, Jefferies India Private Limited, Kotak Mahindra Capital Company Limited, and 360 ONE WAM Limited.

    WeWork India Leading the Race

    For the last three fiscal years, WeWork India has been the biggest operator in India’s premium flexible workspace market by total revenue, according to CBRE. The company has built enduring ties with multinational corporations, including Amazon Web Services, JP Morgan, Warner Bros. Discovery, Deutsche Telekom, and Grant Thornton, thanks to its strong brand, top-notch infrastructure, and affiliation with the WeWork worldwide network.

    Embassy Group, one of India’s leading real estate developers, owns the bulk of WeWork India, which operates under an exclusive licensing deal with the worldwide WeWork brand. In addition to sponsoring Embassy REIT, Asia’s largest office REIT by leasable area and India’s first, Embassy has delivered more than 85 million square feet of commercial real estate.

    WeWork India’s Business Operations

    As of June 30, 2024, approximately 93% of the company’s portfolio consisted of Grade A assets, where it primarily develops, constructs, and manages workspaces. Tier 1 cities such as Bengaluru, Mumbai, Delhi, Gurgaon, Noida, Pune, Hyderabad, and Chennai are served by WeWork India.

    WeWork India’s operating portfolio as of September 30, 2024, included 94,440 desks spread over 59 centres, totalling 6.48 million square feet of leasable space. WeWork Global’s vast network of about 600 locations in 35 countries is another advantage for the business.

    Due to a robust IPO market and a resurgence of investor interest in tech equities, a number of technology businesses intend to go public in 2025.

    Lenskart, an eyeglasses startup, has contacted investment banks to present for the mandate for its possible initial public offering (IPO), which may raise $1 billion. Groww, a stock broker, had selected five investment banks for a $1 billion initial public offering.

    In the near future, startups like SoftBank-backed OfBusiness, contract maker Zetwek, and financial unicorn Pine Labs hope to raise $1 billion through initial public offerings (IPOs). Up to 25 firms hope to debut on the public market in 2025.

    This comprises companies that aim for $500 million initial public offerings (IPOs), such as edtech company PhysicsWallah, AI unicorn Fractal, construction materials portal Infra.market, and leader in rapid commerce Zepto.

  • Jane Street Deposits INR 4840 Cr to Comply with Sebi, Set to Resume India Trading

    In accordance with regulatory orders, Jane Street, a New York-based capital market company, has placed INR 4,840 crore in escrow accounts. Jane Street has no imminent plans to start trading options in the Indian market again after this.

    A temporary account used to keep money or assets while two parties are transacting is called an escrow account. A third party oversees its management. Jane Street, a US-based firm, had previously said that it would contest the SEBI order, which blocked the organisation from the securities markets in India.

    SEBI has ordered the group to disgorge illegal gains of INR 4,843 crore for using holdings in the derivatives market to manipulate stock indices. This was quite likely the largest disgorgement amount that SEBI had ever ordered.

    Why SEBI Barred Jane Street?

    While it continued its inquiry, SEBI’s interim decision prohibited JSI Investments, JSI2 Investments Pvt Ltd, Jane Street Singapore Pte Ltd, and Jane Street Asia Trading—collectively known as the Jane Street Group—from trading until further notice.

    SEBI was investigating the Jane Street (JS) Group for illegally profiting from stock market index level manipulation, namely through the highly liquid Bank Nifty and Nifty index options segments.

    According to a SEBI probe, Jane Street made money from huge holdings and executed significant trades to influence market movements over a 21-day period between January 2023 and May 2025.

    The regulator also observed that Jane Street saw an increase in trading activity across a number of market segments between January 2023 and March 2025. Jane Street Group LLC is a multinational proprietary trading company in the financial services sector that was founded in 2000.

    With five offices in the US, Europe, and Asia, the group has over 2,600 employees. In 45 nations, it carries out trading activities.

    Jane Street’s Response to SEBI

    In an internal letter to staff, the US-based trading company Jane Street slammed the SEBI, calling its recent ruling accusing market manipulation “fundamentally mistaken.”

    The letter went on to say that seeing the company misrepresented in this manner is really distressing. Jane Street is proud of the part it plays in global markets; therefore, it hurts to have a study that contains so many false or unsubstantiated claims damage its reputation.

    In addition to prohibiting Jane Street and its group companies from engaging in the Indian market, SEBI’s ruling ordered the disgorgement of INR 4,834 crore in claimed “unlawful gains.” Additionally, the regulator stated that it was still looking into the group’s other trading tactics.

    The market’s watchdog responded to Jane Street’s allegations by stating that the July 3 ruling, like all SEBI orders, is a speaking order that lays out SEBI’s prima facie case and answers all pertinent issues.

  • Jane Street Slams Sebi Order as ‘Fundamentally Mistaken’ Amid Allegation Storm

    In an internal letter to staff, the US-based trading company Jane Street slammed the Securities and Exchange Board of India (SEBI), calling its recent ruling accusing market manipulation “fundamentally mistaken.”

     The company rejected SEBI’s description of its trading approach as manipulative and instead described it as “basic index arbitrage.” According to Jane Street, it is considering its legal options and is getting ready to respond formally.

    Additionally, it asserted that since February, many attempts to communicate with the market’s regulator have been “consistently rebuffed.”

     Jane Street accused Sebi of using “inflammatory language” and demonstrating a lack of grasp of typical hedging procedures and the connections between derivative and underlying markets in its July 3 order in a letter distributed to staff members over the weekend.

    Deeply Upsetting of Being Mischaracterised: Jane Street

    The letter went on to say that seeing the company misrepresented in this manner is really distressing. Jane Street is proud of the part it plays in global markets; therefore, it hurts to have a study that contains so many false or unsubstantiated claims damage its reputation.

    In addition to prohibiting Jane Street and its group companies from engaging in the Indian market, Sebi’s ruling ordered the disgorgement of INR 4,834 crore in claimed “unlawful gains.” Additionally, the regulator stated that it was still looking into the group’s other trading tactics.

    The market’s watchdog responded to Jane Street’s allegations by stating that the July 3 ruling, like all SEBI orders, is a speaking order that lays out SEBI’s prima facie case and answers all pertinent issues.

    SEBI has nothing more to contribute to what has already been included, clarified, and rationalised in that order at this point. When Sebi initially asked for information about its trading in August 2024, Jane Street claimed to have responded quickly and openly.

    Jane Street’s senior officials from the company’s headquarters in Hong Kong and New York had gone to Mumbai to meet with the National Stock Exchange (NSE), it further stated.

    Why did Sebi Issue the Order?

    Several examples of what SEBI claimed was index manipulation by Jane Street were highlighted in the 105-page study.

    It claimed that on January 17, 2024, the day that weekly index options linked to the NSE Nifty Bank Index were about to expire, the company had engaged in aggressive trading to raise the values of the underlying cash and futures markets.

    According to the report, Jane Street piled up a lot of bearish options transactions and then made a lot of money by closing some of them and letting others expire.

  • Meesho Takes Confidential Route, Files for $1 Billion IPO

    With its DRHP submitted to markets regulator SEBI under the confidential pre-filing procedure, e-commerce giant Meesho has joined the long line of Indian new-age digital businesses seeking to go public.

    According to various media reports, Meesho’s public offering will include a new offering of shares valued at roughly INR 4,250 Cr. Additionally, there would be a large offer for sale component, raising the potential IPO amount to $1 billion (about INR 8,550 Cr).

    This occurs one week after Meesho received approval from its board to fund up to INR 4,250 Cr (about $500 million) through a new public listing issue.

     Meesho, one of the major participants in the Indian e-commerce business and a rival to Amazon and Flipkart, was founded in 2015 by IIT alums Vidit Aatrey and Sanjeev Barnwal. Among its investors are companies like Facebook, Prosus, Elevation Capital, Peak XV Partners, Tiger Global Management, and DST Partners.

    Meesho’s IPO Planning

    For more than two years, the e-commerce company has been preparing for its initial public offering. Cofounder and CEO Aatrey stated in 2022 that Meesho aimed to go public on the stock exchanges within the next 12 to 24 months. It did not, however, move forward with the IPO during that time.

    In December 2024, when Prosus made public an 18-month schedule for the company’s IPO, the IPO discussion resumed. Last month, it also changed its name from Meesho Private Limited to Meesho Limited, becoming a public business.

    The board of the corporation approved the issuance of 411.4 Cr bonus shares at about the same time. Tiger Global, Think Investments, and Mars Growth Capital were among the new investors who joined Meesho’s cap table in January as the company finalised a $250 million to $270 million investment round ahead of filing its DRHP.

    Secondary deals made up the majority of the round. After the National Company Law Tribunal (NCLT) gave its clearance, the company recently moved its headquarters from the USA to India.

    In terms of finances, Meesho was able to reduce its loss from INR 1,675 Cr in FY23 to INR 304.9 Cr in the fiscal year that concluded on March 31, 2024, an 82% reduction. Operating revenue increased from INR 5,734.5 Cr in FY23 to INR 7,614.9 Cr, a 33% increase.

    India’s IPO Trend

    Indian new-age tech companies are lining up in large numbers to submit their draft papers at the same time as Meesho’s submission. In addition to Meesho, four other businesses submitted their DRHPs in the last week.

    But in the first half of 2025, the IPO pace was slowed by global tensions and the tariff war that US President Donald Trump started. Because of this, in H1 2025, just two cutting-edge IT companies—ArisInfra and Ather Energy—debuted on the public market.

    Nonetheless, it is anticipated that the number of IPOs will rise significantly in the second half of the year. Wakefit, Pine Labs, Curefoods, Capillary Technologies, Shadowfax, Shiprocket, and Urban Company are among the cutting-edge tech firms that have submitted their draft papers to SEBI and are currently seeking approval to begin their public offerings.

  • Shadowfax Quietly Gallops Toward IPO, Files Confidential Papers with SEBI

    The Securities and Exchange Board of India (SEBI) has received the draft red herring prospectus (DRHP) from logistics giant Shadowfax for an IPO via private pre-filing process.

    This public announcement is being made in accordance with Regulation 59C(5) of the SEBI ICDR Regulations to notify the public that the company has filed the pre-filed Draft Red Herring Prospectus with SEBI and the stock exchanges.

    The entire filling has been done under Chapter IIA of the SEBI ICDR Regulations with regard to the proposed initial public offering of its equity shares on the main board of the stock exchanges.

    According to media reports, Shadowfax is aiming for a listing for INR 2,000–2,500 Cr, with about 50% of that amount anticipated to be obtained through a new issue, even though the note did not specify the size of the IPO. This development comes three months after it became a public company.

    Shadowfax Likely to Join Other Stalwarts in IPO’s Battleground

    Shadowfax’s move puts it in line with companies such as Aequs, Groww, Shiprocket, boAt, and PhysicsWallah (PW) that have used the confidential filing method to conceal IPO specifics until later in the process.

    The IPO’s principal bankers are Morgan Stanley, JM Financial, and ICICI Securities. Abhishek Bansal and Vaibhav Khandelwal founded Shadowfax in 2015, providing last-mile delivery services to D2C brands and e-commerce platforms. Additionally, it offers value-added services including package exchange, expedited delivery, and reverse logistics.

    Platforms such as Mamaearth, Nykaa, Flipkart, and Meesho are among its customers. According to a media report, Shadowfax was valued at $750 million (about INR 6,518.51 crore) when its co-founders invested INR 65.4 crore in the business earlier in March as part of a larger $50 million investment.

    In addition to the cash, Shadowfax changed its board in February by adding Pirojshaw Sarkari, Ruchira Shukla, and Bijou Kurien as independent directors in accordance with the regulatory requirement.

    IPO and Ongoing Market’s Sentiments

    The announcement of Shadowfax’s IPO coincides with a period of market correction and recovery thus far this year. Although the market correction kept the climate unfavourable for initial public offerings (IPOs) until April, the overall market has since shown an upward trend.

    Despite uncertainty amid major geopolitical shifts (such as the US-induced tariff issue, the India-Pakistan conflict, and the Israel-Iran war), an EY report stated that the global IPO market grew 20% YoY by value, even though Ather and ArisInfra are the only new-age technology companies that have gone public this year thus far.

    According to the research, India’s initial public offering (IPO) industry is still exhibiting resilience, accounting for 22% of worldwide IPO activity in Q1 2025, with 62 IPOs raising a total of $2.8 billion during the quarter.

    Consequently, over 20 cutting-edge tech firms are currently preparing to go public this year. These companies, which include, among others, PhysicsWallah, Zappfresh, BlueStone, boAt, CarDekho, Groww, Meesho, and Flipkart, are now certain in their intentions to submit IPO applications.

  • Meta Cracks Down: SEBI Verification Now Mandatory for Investment Ads

    In a significant crackdown on fraudulent market consultants and investment gurus, or “furus”, Meta has required advertiser authentication for all securities and investment-related advertisements that target Indian consumers beginning on July 31.

    All advertisers running investment ads in India, including international campaigns targeting Indian audiences, must confirm the person or entity benefiting from and paying for the ad by providing valid SEBI registration details, according to updated terms of service announced on June 26 by Meta.

    This comprises the name of the company, its SEBI registration number, and its registered phone number and email address. For authentication, Meta will supply the specified contact with a verification code.

    Along with unique disclaimers made during ad setting, the SEBI registration number, organisation name, and location would be shown publicly on the advertisement as payer and beneficiary.

    Advertisers to Get One Month to Complete Verification

    According to Meta, advertising professionals will have at least a month to finish the screening procedure, and by July 28, the feature should be completely operational.

    As long as the advertiser account is validated, ads that were active before July 31 do not require editing. In an effort to improve transparency and prevent fraud by dishonest influencers, the capital market regulator partnered with digital platforms to verify financial advisors earlier this year after much consideration and a thorough consultation process.

    Meta has established alternative verification mechanisms for individuals who seek exemption from regulator registration, such as financial instructors or trainers.

    Organisations must upload pertinent business documents, and individuals must present at least one government-issued ID. The advertisements will continue to reveal the confirmed identity.

    Ads that Don’t Require Verification  

    Ads pertaining to training, talent development, or financial education might not need SEBI verification, Meta explained. Cyber law expert counsel (Dr) Prashant Mali said that Meta’s verification of SEBI credentials was long overdue and that Google should do the same for its YouTube channel.

    In actuality, META and Google, with SEBI’s assistance, must immediately eliminate all prior shorts, reels, and videos that violate SEBI regulations and ultimately mislead investors. This verification was something that Dr Mali was always pushing for.

    The action comes after a news release issued by SEBI on March 21 requesting that all intermediaries registered with the agency that advertise on social media platforms submit their verified contact information with the agency.

    A surge in securities-related scams on websites like YouTube, Facebook, Instagram, WhatsApp, X (formerly Twitter), Telegram, Google Play Store, and Apple App Store was noted by the regulator.

    According to Meta, the policy’s objectives are to improve customer safety, stop fraud and impersonation, and maybe expand such regulations to other financial product categories in the future.