'FOMO, fixed return': SEBI proposes revamped ad code for bond portals from misleading investors

In a decisive move to protect retail investors navigating the rapidly expanding online debt market, capital markets regulator Securities and Exchange Board of India (SEBI) issued a consultation paper on August 21, 2026, proposing a revamped Advertisement Code for Online Bond Platform Providers (OBPPs).

Driven by a surge in digital promotions, influencer marketing, and aggressive behavioural prompts across electronic channels, the regulator aims to stamp out misleading claims of guaranteed returns, artificial scarcity, and fear-of-missing-out (FOMO) messaging that lure unsuspecting individuals into unvetted fixed-income transactions.

The online bond platform ecosystem has witnessed unprecedented expansion in investor participation over recent years. However, this growth has been accompanied by a visible shift in how debt instruments are marketed.

OBPPs have increasingly leveraged social media, online banner campaigns, and financial influencers to market high-yield and structured bond products. SEBI noted that many of these promotional strategies rely heavily on behavioral prompts and urgency-driven tactics designed to push investors into making hurried financial commitments without conducting adequate due diligence.

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Moreover, SEBI highlighted that it has received multiple representations from market participants seeking clarity on debt terminology, alongside investor complaints regarding deceptive marketing practices.

In response, SEBI's Corporate Bonds and Securitisation Advisory Committee (CoBoSAC) evaluated the market landscape and recommended a tightened code specifically tailored to the nuances of debt securities.

This specialised code will build upon an overarching Common Advertisement Code currently being developed by SEBI's Market Intermediaries Regulation and Supervision Department (MIRSD) for all regulated entities.

Mandatory disclosures for 'fixed returns'

Under the proposed framework, SEBI mandates that every advertisement displaying an available debt security on an OBPP platform must explicitly present standardised details to facilitate comparisons.

Advertisements must prominently detail the Name of the Issuer, Tenor, Nature of Security (Secured or Unsecured), Clean Price and Dirty Price, Yield to Maturity (YTM), Credit Risk-o-meter, and comprehensive Credit Rating Details — including rating changes and direct references to the rating rationale or press release.

Addressing industry terminology, SEBI acknowledges that debt securities are inherently fixed-income products and will permit OBPPs to use terms like "fixed returns", "returns are predictable", or "passive income". However, these terms must strictly be used in a generic, non-promissory manner, backed by explicit calculation methods and risk disclosures without implying guaranteed yields.

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Whenever a range of fixed returns is advertised, it must be accompanied by an asterisked disclaimer reflecting platform inventory on that date, rendered in a uniform font size without giving undue prominence to the higher yield limit.

Mandatory warning & Blanket prohibitions

To ensure complete clarity on investment risks, SEBI has formulated a mandatory standard warning that must be displayed in a legible font size of at least 10 points across all promotional material: "Fixed returns are not guaranteed returns. Investments in debt securities are subject to market, credit and default risks. Read all offer related documents carefully."

The regulator explicitly forbids any addition, deletion, or substitution of words in this standard warning. For regional language advertisements, the warning must be faithfully translated into the respective language, while audio-visual media must feature clear visual text and audible voiceover reiterations.

Crucially, SEBI is imposing strict prohibitions on subjective marketing jargon. The draft rules outright ban vague adjectives such as "high yield", "high rated", and "high returns", or any ungrounded synonyms. Celebrities remain barred from endorsing bond platform products. Additionally, OBPPs are prohibited from advertising their own holdings or inventory in any debt security or ISIN within promotional materials.

Rules for market-linked debentures & Holding disclosures

Advertisements concerning Principal Protected Market Linked Debentures (MLDs) cannot advertise or imply assured or guaranteed returns.

They must carry adequate risk disclosures concerning the underlying benchmark along with reference to the offer document issued by the issuer and the specific disclaimer: "Principal Protected Market Linked Debentures do not offer fixed or assured returns. Payouts depend on the underlying benchmark performance."

While holding details cannot be featured in advertisements, OBPPs are permitted to disclose their holdings to existing clients on their platform strictly in a standardized tabular format containing the Issuer name, ISIN, latest credit rating (with press release references), total units issued, total units offered for sale on the platform, and total units held by the OBPP.

SEBI has invited public feedback, suggestions, and counter-proposals on the draft circular. Market participants and investors can submit their comments through SEBI's web-based public comment portal until September 11.