MUMBAI: The markets regulator Sebi has proposed a uniform 30-day time lag for both sharing and using stock price data for investor education purposes with a view to curb misuse of live market data while keeping educational content timely and relevant. The new draft seeks to ensure that the educators are using market data only for educational purposes, not for investment recommendations or research analysis.
The aim is to stop live market data from being misused while keeping investors protected, said the regulator, who at the same time wants educational content to stay practical and useful for learning about the markets. The objective is to strike a balance between preventing misuse of real-time market data and ensuring that educational content remains relevant and effective.
Sebi’s proposal comes after a series of regulatory steps aimed at curbing the misuse of real-time market data by online gaming platforms, apps, and websites and the so-called influencers. The new proposal also aims at making rules more consistent. It is to be noted that as the May 24, 2024 and January 29, 2025 circulars created some confusion as the first one allowed data sharing data for teaching purposes with just a one-day delay, while the second circular dated required said three months lag.
In a May 24, 2024 circular, the regulator made it clear that “no real-time price data is shared with any third party, including various platforms”, unless such sharing is necessary for the orderly functioning of the securities market or to meet regulatory requirements. For investor education and awareness activities, Sebi allowed the sharing of price data only with a time lag of one-day.
The intention was to prevent real-time data from being used for speculative or gaming-like activities under the guise of education. In another circular dated January 29, 2025, the watchdog had added that price data used for investor education and awareness activities should have a time lag of three months. Sebi explained that a key factor separating investor education from advice or recommendations was the kind of market data used to create the content.
“Using live data for educational purposes is clearly outside the scope of pure educational activity as it involves analysing current data to predict future prices, which falls under the definition of investment advisory/research analyst activity,” Sebi had said then.
Under the revised framework, market infrastructure institutions were intermediaries are allowed to share price data with a minimum one-day lag for preparing educational content. However, educators could use only price data that was at least three months old. Any deviation from this, Sebi warned, could result in the activity being treated as investment advisory or research analyst activity.
The new draft seeks to ensure that the educators are using market data only for educational purposes, not for investment recommendations or research analysis. Sebi acknowledges that the live or near-real-time market data can be easily used as investment recommendations and for research activities in the disguise of educational purposes. Investment recommendations and research have been strictly regulated under Sebi’s rules for investment advisers and research analysts.