The disclosure of real-time share price information to third parties, including various online platforms, is now subject to new regulations released by the Securities and Exchange Board of India (SEBI).
The SEBI released new guidelines on Friday to regulate the sharing of real-time share price information with other parties, including various internet platforms.
It has been noted that a number of websites, apps, and other online gaming platforms (henceforth referred to as "platforms") offer fantasy games or virtual trading services that are based on the movement of listed companies' real-time share prices, or pricing data. According to SEBI, some platforms even provide financial incentives that are contingent on how well the virtual stock portfolio performs.
In order to address these issues, SEBI has issued a variety of guidelines to the Market Infrastructure Institutions (MIIs), which include stock exchanges, clearing firms, depositories, and regulated market intermediaries.
As per SEBI's guidelines, market intermediaries and MIIs must ensure that real-time price data is not shared with external parties unless it's necessary for regulatory compliance or the smooth functioning of the securities market.
It additionally added that organizations intending to exchange real-time price data must execute legal agreements outlining the intended uses of the data in order to guarantee the securities market operates properly. The list of entities and activities must be reviewed by the board of the MIIs or intermediaries once a year.
The new guidelines will go into force thirty days after the circular is published, according to SEBI.
When distributing market price data to educate and increase investor awareness, SEBI says there's no need for financial incentives; nonetheless, the data must be one day behind schedule.
Furthermore, SEBI directed the MIIs and intermediaries to include provisions in agreements to prevent misuse and to take reasonable precautions while sharing data. They also need to take all required safety measures to prevent companies from misusing pricing information.
