Sebi proposes new rules for sharing for financial market data for research and analysis

The market regulator has proposed new draft rules to create a standardized policy for sharing financial market data with research institutions, analysts and other stakeholders.

The Securities and Exchange Board of India (Sebi) had formulated a data-sharing policy in 2018 for analytics projects, research activities, and more. Since its inception, the regulator has received numerous data-sharing requests, underscoring the need to modify and streamline the process.

Revised framework

The regulator’s Market Data Advisory Committee (MDAC) suggested that Sebi should share only the data which is under its ownership. The data generated by the market infrastructure institutions such as exchanges, depositories and clearing corporations, the committee suggested. For this purpose, every MII should have their own data-sharing policy, Sebi said in a consultation paper released on Tuesday.

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MDAC also emphasized the importance of sourcing data from reliable and authentic sources. Based on these recommendations, Sebi proposed a revised framework for sharing data specifically for research and analysis.

Sebi’s proposed changes suggest stock exchanges, depositories, and clearing corporations will each be responsible for establishing their own data-sharing policies, specifically for research purposes. Data shared with vendors for commercial purposes will not fall under this policy.

To facilitate this, Sebi advised MIIs to segregate the data available for each market segment into two distinct categories:

The first basket includes information that can be shared with the public and should not include personal, sensitive, or confidential information. This basket will include information on respective websites of each MII, voluminous data which cannot be easily placed on MII website.

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Non-public data would come in second basket which includes sensitive or confidential data such as KYC, trade logs and anonymized data that could potentially be used to re-identify an individual or entity.

MIIs will be required to share a list of data items under each basket with Sebi within 60 days of the issuance of this circular.