Last updated: May 28, 2024 | 3:16 PM IST
The Securities and Exchange Board of India (SEBI) has cracked down on the sharing of real-time stock market data with third parties, including online platforms offering virtual trading and fantasy games based on live stock prices. SEBI has expressed concern that some platforms are even offering remuneration based on the performance of virtual stock portfolios.
The new regulations target registered market intermediaries as well as market infrastructure institutions (MIIs) such as stock exchanges and depositories. These entities are currently prohibited from sharing real-time price data with third parties unless strictly necessary for the smooth functioning of securities markets or regulatory compliance. However, it does not affect media agencies that provide real-time data feeds.
SEBI requires formal agreements that outline the purpose of data sharing and ensure that it supports a well-functioning market. These agreements and the list of entities receiving real-time data are subject to annual review by the MII or intermediary.
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The new guidelines will come into effect 30 days after publication of the circular. SEBI has made it clear that market data can be shared for investor education, but with a one-day delay and without any financial incentives. The regulator also directed MIIs and intermediaries to conduct thorough due diligence before sharing data and to include measures in their contracts to prevent misuse.
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First published: May 28, 2024 | 2:53 PM IST
