Sebi action on fantasy games operating on real-time stock market data

The Securities and Exchange Board of India (Sebi) on Friday restricted the sharing of real-time market data around stock prices to third-party entities in a bid to clamp down on fantasy games and virtual trading platforms.

The market regulator has directed stock exchanges, clearing members, depositories, and stockbrokers to not share real-time price data for third parties.

It has also directed market intermediaries to formalise agreements around data sharing and specify the reasons for seeking real-time data.

“MIIs or market intermediaries shall enter into an 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 the orderly functioning of the securities market,” said Sebi.

At least once in a financial year the list of activities and entities using this data will have to be reviewed by the board of MIIs. 

The move comes at a time when there has been a rising trend of betting, leagues, and transactions on these online gaming platforms using real-time data on price movements. These games could have an entry amount and winning prizes. Users compete on who makes the best-performing portfolio linked to the real stock performance.

“Some platforms are even offering monetary incentives based on the performance of the virtual stock portfolio,” Sebi said.

Stock exchanges offer real-time data as a paid service to stockbrokers and subscribers for various market segments. 

For usage of the market data for educational programmes, the regulator has directed sharing the same with a day’s lag.

“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 one day,” said Sebi.

The new norms become applicable after a month.