Capital Market

SEBI issues norms for sharing real-time stock price data with third parties

24.05.2024

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). It has been noticed that, certain online gaming platforms, apps, websites, etc. (“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. Based on the recommendations of SMAC and in order to curb misuse or unauthorized use of such data, SEBI issues norms for sharing of real time price data with third parties.

Stock exchanges, clearing corporations and depositories (Market Infrastructure Institutions (MIIs)) and registered market intermediaries shall ensure that no real time price data is shared with any third party including various platforms, except where sharing of such information is required for orderly functioning of the securities market or for fulfilling regulatory requirements. MIIs or market intermediaries shall enter into appropriate agreement with entities with whom they intend to share real time price data.

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. 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. MIIs and market intermediaries shall ensure due diligence. The legal agreement for sharing the data shall have provisions to prevent any kind of misuse of the same by the entities. The MIIs and the market intermediaries shall take necessary steps to avoid misuse of price data by entities with whom the data is being shared. All MIIs are advised to take necessary steps and put in place necessary systems for implementation of the norms.

Tags : Norms Issuance Third parties

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