Sebi Tightens Reins on Real-Time Share Price Data Sharing

Sebi has introduced new norms to regulate the sharing of real-time price data of shares with third parties. The rules aim to prevent misuse of the data by online platforms offering virtual trading services. Agreements and due diligence are required, and data can only be shared for investor education with delays.

Capital markets regulator Sebi on Friday came out with norms for sharing real-time price data of shares of listed companies with third parties including various platforms in a bid to curb misuse of such data.

This came after Sebi observed that certain online gaming platforms, apps, websites, etc. are providing virtual trading services or fantasy games which are based on movement of real-time share prices (price data) of listed companies.

In fact, some platforms are even offering monetary incentives based on the performance of the virtual stock portfolio, Sebi noted.

To prevent misuse or unauthorized use of real-time price data, certain rules apply, Sebi said in a circular.

These rules includes Market Infrastructure Institutions (MIIs) including stock exchanges and registered market intermediaries must ensure that real-time price data is not shared with any third party unless necessary for the proper functioning of the securities market or regulatory compliance, the regulator said.

MIIs or intermediaries must have agreements with any entity they share real-time price data with. These agreements must specify the activities and reasons for using the data, ensuring it supports the securities market's orderly functioning. The list of entities and activities must be reviewed by the board of MIIs or intermediaries at least once a year.

Market price data can be shared for investor education and awareness without any monetary incentives, but it must be delayed by one day.

MIIs and intermediaries must conduct due diligence when sharing data and include provisions in agreements to prevent misuse. Also, MIIs and intermediaries should take all possible steps to prevent misuse of price data by the entities they share it with.

These rules will take effect 30 days after the issuance of this circular, Sebi said.

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