SEBI Bans Data Sharing Between Exchanges and Fantasy Stock Market Apps
The Securities and Exchange Board of India (SEBI) has banned stock exchange depositories, and clearing corporations from sharing real-time share price data with fantasy trading apps that turn stock trading into a game.
In a notice on May 24, SEBI said the ban is to prevent the misuse of market information. If any company wants to share data with another party, they must follow these rules:
- No real-time price data can be shared with any online gaming platforms, apps, or websites that offer virtual trading services or fantasy games based on the real-time prices of listed companies.
- From now on, market infrastructure institutions (MIIs) must monitor how the real-time price data they share is being used. They need to review the list of entities and activities using this data at least once a year.
- If the data is shared for investor education and awareness, no money should be involved, and the data should have a one-day delay.
Zerodha cofounder and CEO Nithin Kamath believes these new guidelines will likely bring an end to the fantasy stock trading industry.
In a detailed post on X, he explained that SEBI’s circular effectively means that platforms offering trading competitions, demo trading, contracts for difference (CFDs), and similar services will no longer be able to operate. Kamath said that without real-time share price data, these platforms simply won’t work and hence many of them will now be forced to shut shop. SEBI’s move is meant to stop the abuse of market information and that in turn means the fantasy trading industry as we know it won’t be able to survive.
