On Friday, May 24, the Securities and Exchange Board of India (SEBI) announced new regulations regarding the sharing of real-time stock price information with third parties, including various online platforms.
The aim of these rules is to regulate how real-time stock price information is shared with third parties, especially online platforms.
SEBI highlighted that certain online gaming platforms and apps are using real-time stock prices for virtual trading services or fantasy games. Some even offer rewards based on how well a virtual stock portfolio performs.
To address these concerns, SEBI has issued directives to Market Infrastructure Institutions (MIIs), such as stock exchanges, clearing corporations, depositories, and regulated intermediaries.
MIIs and intermediaries must ensure that real-time price data is not shared with external parties unless necessary for regulatory compliance or the proper functioning of the securities market.
Furthermore, organizations intending to share real-time price data must have written agreements specifying how the data will be used. MIIs or intermediaries’ boards must review the list of entities and activities annually.
The new rules will come into effect thirty days after the circular’s release.
SEBI emphasized that sharing market price data for educational purposes should not involve financial incentives, and the data must be delayed by one day.
MIIs and intermediaries must include clauses in agreements to prevent misuse and exercise due diligence when sharing data. They must also take necessary measures to prevent misuse of price data by businesses.
These measures aim to ensure fair and transparent sharing of real-time price information in the securities market.
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