Brokers can't hire celebrities to endorse prize money schemes

Mumbai: Top stock exchanges BSE and NSE have barred brokers from engaging celebrities to endorse schemes involving distribution of prize money and asked them to withdraw advertisements, if any, with immediate effect.

The National Stock Exchange (NSE) has decided not to approve any advertisement by brokers which are related to leagues or schemes or competitions till further communication.

The move follows directives issued by capital market regulator Sebi in this regard.

In respect of schemes offered by third-party or group company or associate of the stock broker, which may involve distribution of prize money and advertisements issued by stock brokers, trading members are hereby advised to ensure they shall not carry out advertisements in which celebrities form part of the advertisement, BSE and NSE said in two similarly worded circulars.

In its notice, NSE has also asked its trading members to withdraw any advertisement already issued on leagues, schemes and competitions that are featuring celebrities with immediate effect.

"... Approval will not be granted to any advertisement by brokers which are related to leagues/schemes/competitions etc till further communication," it added. Earlier this week, BSE had issued a cautionary note to its investors against schemes offered by third party or group company involving prize money.

The exchange had said participation in such schemes is at investors' own risk, cost and consequences as these are neither approved nor endorsed by the exchange.

Besides, BSE has said that in disputes relating to such schemes, facilities such as stock exchange dispute resolution mechanism, investor grievance redressal administered by the stock exchange and benefits of investor protection under Sebi/stock exchange jurisdiction will not be available to investors.