Executive Summary:
SEBI's circular addresses concerns about real-time price data being shared with third-party platforms, including online gaming and virtual trading services. It restricts the sharing of real-time price data by Market Infrastructure Institutions (MIIs) and registered market intermediaries, except when required for orderly market functioning or regulatory needs. The circular is effective 30 days from its issuance date of May 24, 2024, and requires MIIs to implement necessary systems and amend relevant regulations.
Key Points / Main Content:
* **Restrictions on Sharing Real-Time Price Data:**
* MIIs and registered market intermediaries are prohibited from sharing real-time price data with third parties, including online platforms, unless it's for orderly market functioning or regulatory requirements.
* **Agreements for Data Sharing:**
* MIIs or market intermediaries must have agreements with entities they share real-time price data with, specifying the data's usage and justification for orderly market functioning.
* The list of entities and activities involving data sharing must be reviewed by the Board of MIIs or market intermediaries at least annually.
* **Investor Education and Awareness:**
* Market price data may be shared for investor education and awareness activities without monetary incentives, with a one-day lag.
* **Due Diligence and Misuse Prevention:**
* MIIs and market intermediaries must conduct due diligence when sharing data and include provisions in legal agreements to prevent misuse.
* They should take steps to avoid misuse of price data by entities with whom the data is shared, using their best efforts.
* **Implementation and Amendments:**
* MIIs must implement necessary systems.
* MIIs must amend byelaws, rules, and regulations as needed.
Impact Analysis:
* **Stock Exchanges, Clearing Corporations, Depositories (MIIs):**
* *Impact:* Stricter regulations on sharing real-time price data, potential need to revise agreements and internal systems.
* *Action Required:* Implement necessary systems, amend relevant byelaws/rules, and inform market participants.
* **Registered Market Intermediaries:**
* *Impact:* Restrictions on sharing real-time price data, potential need to revise agreements and internal systems.
* *Action Required:* Implement necessary systems and ensure compliance with the new norms.
* **Online Gaming Platforms, Apps, Websites (Third Parties):**
* *Impact:* Reduced access to real-time price data, potential need to modify services or offerings.
* *Action Required:* Adapt business models to comply with restrictions on real-time data access.
* **Investors:**
* *Impact:* Indirectly affected through changes in data availability on third-party platforms; continued access to delayed data for educational purposes.
* *Action Required:* Be aware of potential changes in data availability on various platforms.
Key Entities Referenced
Securities and Exchange Board of India (SEBI): The regulatory body for securities markets in India, responsible for protecting investors and regulating the securities market.
Secondary Market Advisory Committee of SEBI (SMAC): A committee within SEBI that advises on matters related to the secondary market.
Market Infrastructure Institutions (MIIs): Refers to stock exchanges, clearing corporations, and depositories, which are essential infrastructure for the securities market.
Depositories Act, 1996: An act of the Indian Parliament that provides a legal framework for the establishment and regulation of depositories in India.
Securities and Exchange Board of India Act 1992: An act of the Indian Parliament that established the Securities and Exchange Board of India (SEBI).
Securities Contracts Regulation Stock Exchanges and Clearing Corporations Regulations, 2018: Regulations pertaining to stock exchanges and clearing corporations.
Securities and Exchange Board of India Depositories and Participants Regulations, 2018: Regulations pertaining to depositories and participants.
Hruda Ranjan Sahoo: Deputy General Manager at SEBI, responsible for issuing the circular.
CIRCULAR
SEBI/HO/MRD/MRD-PoD-3/P/CIR/2024/56 May 24, 2024
To
All Recognized Stock Exchanges
All Recognized Clearing Corporations
All Depositories
All Registered Market Intermediaries
Sir/Madam,
Subject: Norms for sharing of real time price data to third parties
1. 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 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.
2. The issue of sharing of real time price data with third parties including various platforms
was deliberated in Secondary Market Advisory Committee of SEBI (SMAC). Based on
the recommendations of SMAC and to curb misuse or unauthorized use of such data, it
has been decided that sharing of real time price data with third parties shall be subject to
the following:
i. Stock exchanges, clearing corporations and depositories (collectively referred as
Market Infrastructure Institutions (MIIs)) and registered market intermediaries shall
ensure that no real time price data is shared with any third party including various
Page 1 of 3platforms, except where sharing of such information is required for orderly functioning
of the securities market or for fulfilling regulatory requirements.
ii. MIIs or market intermediaries shall enter into appropriate agreement with entities with
whom they intend to share real time price data. The said agreement shall provide for
activities for which the real time price data would be used by the entity including the
justification that it is required for orderly functioning of the securities market. The list of
entities and activities for which the real-time data is being shared with shall be
reviewed by the Board of the MIIs or market intermediaries at least once in a financial
year.
iii. Market price data may be shared for investor education and awareness activities
without offering any kind of monetary incentive to the participants, with a lag of 1 day.
iv. MIIs and market intermediaries shall ensure due diligence while sharing such data.
The legal agreement for sharing the data shall have provisions to prevent any kind of
misuse of the same by the entities.
v. The MIIs and the market intermediaries shall on best effort basis take necessary steps
to avoid misuse of price data by entities with whom the data is being shared.
3. The provisions of the circular shall be applicable from the 30th day of issuance of the
circular.
4. All MIIs are advised to:
i. take necessary steps and put in place necessary systems for implementation of the
above.
ii. make necessary amendments to the relevant bye-laws, rules and regulations,
wherever required, for the implementation of the above; and.
iii. bring the provisions of this circular to the notice of the market participants (including
investors) and disseminate the same on their website.
Page 2 of 35. This circular is issued in exercise of the powers conferred under section 11(1) of the
Securities and Exchange Board of India Act 1992 read with regulation 51 of the
Securities Contracts (Regulation) (Stock Exchanges and Clearing Corporations)
Regulations, 2018, section 26(3) of the Depositories Act, 1996 and regulation 97 of
Securities and Exchange Board of India (Depositories and Participants) Regulations,
2018 to protect the interests of investors in securities and to promote the development
of, and to regulate the securities market.
6. This circular is available on SEBI website at www.sebi.gov.in at “Legal Framework -
Circulars.”
Yours faithfully,
Hruda Ranjan Sahoo
Deputy General Manager
Tel no.: 022-26449586
Email: hrsahoo@sebi.gov.in
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