_20240527225022_original_image_11.webp)
The Securities and Exchange Board of India (SEBI) is cracking down on gaming apps that provide virtual trading services and fantasy games using real-time share prices of listed companies. These apps have surged in popularity, driven by a growing retail investor interest in stock trading.
SEBI has instructed stock exchanges and depositories to cease sharing real-time price data with third parties to curb these activities. A regulatory official clarified that while using data for educational or entertainment purposes is acceptable, offering monetary incentives based on the performance of virtual stock portfolios is prohibited. "Then it’s like dabba trading, which is illegal," the official stated.
Media agencies providing real-time data feeds will not be impacted by SEBI's action.
Recently, numerous stock gaming platforms have emerged in India. These platforms do not facilitate real-time trading through stock brokers but allow users to compete based on fictional trading strategies and portfolios. Participants pay a membership fee to join and top performers are awarded prizes.
“This is a precautionary measure as it’s a niche segment,” said a member of SEBI’s expert committee on the secondary market.
In some developed countries, gaming based on real-time feeds is allowed, as exchanges generate substantial revenue from data dissemination. However, SEBI regulations prohibit offering any games or leagues related to the securities markets.
“If you are doing a wager contract it is not allowed. This is all unauthorised usage of data. We are now putting the responsibility on those who have data,” the regulatory official emphasised.
“Exchanges and depositories will have to monitor how the data is being utilised.”
