On Friday, May 24, the Securities and Exchange Board of India (SEBI) unveiled new rules governing the dissemination of real-time share price information to third parties, including different online platforms.
To control the dissemination of real-time share price information to other parties, including different online platforms, the SEBI unveiled new rules on Friday.
“It has been observed that certain online gaming platforms, apps, websites, etc. (hereafter referred to as “platforms”) are providing virtual trading services or fantasy games which are based on the movement of real-time share prices (price data) of listed companies. Some platforms are even offering monetary incentives based on the performance of the virtual stock portfolio” said SEBI.
The Market Infrastructure Institutions (MIIs), which include stock exchanges, clearing companies, depositories, and regulated market intermediaries, have received a number of directives from SEBI in order to address these concerns.
According to SEBI, MIIs and market intermediaries are required to make sure that real-time pricing data is not disclosed to any outside parties unless it is required for regulatory compliance or the securities market to operate properly.
It further stated that in order to ensure the proper operation of the securities market, organisations planning to share real-time pricing data must sign written agreements that specify the purposes for which the data would be utilised. The board of the MIIs or intermediaries is required to examine the list of entities and activities once a year.
According to SEBI, the new norms would take effect thirty days after the circular is released.
SEBI states that there is no need for financial incentives when sharing market price data for the purpose of educating and raising investor awareness, however the data must be delayed by one day.
In addition, SEBI instructed the MIIs and intermediaries to incorporate clauses to avoid misuse in agreements and to exercise due diligence when exchanging data. Additionally, they must take all necessary precautions to stop businesses from abusing price data.
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Published: 25 May 2024, 10:58 AM IST
