Celebrity endorsement

A celebrity cannot be hired to tell people to buy a particular mutual fund scheme, or to promote one AMC over another. SEBI drew that line deliberately.

What is allowed is narrower: a celebrity can front a campaign that promotes mutual funds as a category — the idea of investing in them at all — to build awareness across the whole industry. Think of it as advertising the product type, the way a generic "drink more milk" campaign promotes milk without naming a dairy brand.

Even that narrower use needs SEBI's sign-off before it runs, and the money spent on it has to come from the pool AMCs jointly set aside for investor education, not from any one AMC's marketing budget.

Chapter 4 sets out three conditions for celebrity endorsement of mutual funds at the industry level:

1. It must not promote a scheme of a particular mutual fund, or serve as a branding exercise for a mutual fund house or AMC.
2. Expenses must be limited to the amounts aggregated by mutual funds at the industry level for investor education and awareness initiatives — not drawn from an individual AMC's budget.
3. Prior approval of SEBI is required before any such endorsement is issued.

The rule sits alongside other advertisement controls in the same chapter — including performance-advertising disclosure rules for fund managers — as part of SEBI's broader supervision of how mutual funds are marketed to the public.

Illustrative — the workbook states the rule, not a worked rupee figure.

AMFI plans a television campaign featuring a well-known actor with the message "start investing in mutual funds today," funded from the industry's pooled investor-education budget of, say, Rs 15 crore for the year. This is exactly the permitted use: category-level, industry-funded, and filed with SEBI for prior approval.

Contrast a single AMC that wants the same actor to say "invest in our flagship equity fund" in its own television advertisement, paid from its own marketing budget. That crosses the line on all three conditions at once — it names a scheme, it is a branding exercise for one AMC, and it would not be funded from the industry pool.

Chapter 4 (Legal and Regulatory Framework) covers celebrity endorsement as part of SEBI's rules on advertisements. The workbook's own sample question tests exactly this distinction — industry-level endorsement is permitted, scheme- or AMC-level endorsement is not.

• Industry-level only. A celebrity endorsing one AMC's scheme, or that AMC's brand, is not permitted under this rule.
• The funding source matters as much as the message. Even a category-level message funded from a single AMC's own budget would not meet condition two.
• SEBI approval is required in advance, not after the campaign has already run.