The Securities and Exchange Board of India (Sebi) is taking significant steps to enhance the transparency and accessibility of financial market data. With the rise in demand for data from research institutions, analysts, and other stakeholders, Sebi has proposed a new draft that aims to establish a standardized policy for sharing financial market data.
Background of the Data-Sharing Policy
Initially introduced in 2018, Sebi’s data-sharing policy was designed to facilitate analytics projects and research activities within the financial sector. Over the years, the regulator has received a multitude of requests for data-sharing, highlighting the necessity for an updated and more streamlined process.
Revised Framework for Data Sharing
To address the evolving landscape of financial data needs, the Market Data Advisory Committee (MDAC) has put forth recommendations that will refine how Sebi shares market data. One of the key recommendations is that Sebi should only share data that it owns, particularly that which is generated by market infrastructure institutions (MIIs) like stock exchanges, depositories, and clearing corporations. Consequently, each MII will be tasked with creating its own data-sharing policy to ensure clarity and compliance with these recommendations.
Importance of Authentic Data Sources
MDAC has highlighted the critical need for ensuring that all shared data is sourced from reliable and authentic origins. This recommendation is aimed at fostering trust and confidence in the data being used for research and analysis.
Data Segregation for Responsibility
One of the pivotal proposals from Sebi indicates that each MII, including stock exchanges, depositories, and clearing corporations, will be responsible for developing their individual data-sharing policies dedicated specifically to research purposes. It is important to clarify that any data shared with third-party vendors for commercial purposes will not be included in this policy.
Categories of Shared Data
To facilitate effective data management, Sebi has advised MIIs to categorize market data into two distinct groups:
Publicly Accessible Data
The first category encompasses information that can be shared freely with the public. This dataset must not contain any personal, sensitive, or confidential information. It will include a wide range of data, such as aggregated statistics and information made available on the respective MIIs’ websites. Additionally, high-volume data that cannot be easily hosted on MII websites will also be included in this category.
Non-Public Data
The second category comprises non-public data, which includes sensitive information such as Know Your Customer (KYC) details, trade logs, and anonymized datasets that could potentially be reverse-engineered to identify individuals or entities. This careful distinction is critical for protecting privacy while still enabling analysis.
Compliance and Reporting
To ensure adherence to these new guidelines, MIIs will be required to compile and submit a comprehensive list of data items for both categories to Sebi within 60 days following the issuance of the new circular. This requirement will help maintain oversight and ensure that all entities comply with the new data-sharing protocols.
