SEBI Proposes Uniform 30-Day Lag for Stock Price Data in Education
SEBI has proposed a uniform 30-day lag for sharing stock price data for educational purposes, seeking to balance misuse prevention with content relevance. The proposal follows the regulator's ban on financial influencer Avadhut Sathe for offering unregistered investment advisory services under the guise of training programmes, highlighting enforcement concerns in the educational space.
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The Securities and Exchange Board of India (SEBI) has proposed a uniform 30-day lag for both sharing and usage of stock price data for educational and awareness activities. In a consultation paper released recently, the market regulator emphasized that this timeframe would adequately protect against misuse of exchange data while maintaining the relevance of educational content.
The proposal comes in the wake of the regulator banning financial influencer Avadhut Sathe of Avadhut Sathe Trading Academy from the securities market for offering unregistered investment advisory and research analyst services. SEBI alleged that Sathe, despite not being registered as an investment adviser, offered advisory services under the guise of stock market training programmes to a large number of investors.
Current Regulatory Framework
Stock exchanges currently share live data exclusively for trading and related activities. The regulatory evolution began with SEBI's May 24, 2024 circular, which prescribed a one-day time lag for educational and awareness activities. This was followed by a subsequent circular that further tightened the framework, requiring entities engaged solely in education to use market data only with a three-month lag.
| Timeline | Circular Date | Data Lag Period | Purpose |
|---|---|---|---|
| Initial Framework | May 24, 2024 | 1 day | Educational activities |
| Enhanced Restrictions | Subsequent circular | 3 months | Pure educational use |
| Current Proposal | Recent | 30 days | Uniform framework |
SEBI on May 24, 2024 prohibited stock exchanges from sharing real-time price data to third parties, in an attempt to prevent online gaming platforms, apps and websites from using such data of listed companies. The ban remains in force. It then introduced the one-day lag for sharing the data for preparing content and, subsequently, the three-month rule for classrooms and other educational activities.
Stakeholder Feedback and Internal Assessment
SEBI received substantial stakeholder feedback indicating that the one-day time lag was insufficient, with possible cases of misuse making a strong case for increasing the time lag period. Stakeholders expressed concerns that the short timeframe remained vulnerable to exploitation in online gaming platforms and similar applications.
Conversely, SEBI's internal deliberations concluded that the three-month lag was excessively long, reducing the practical effectiveness of educational content. The regulator determined that educational input could be more efficient with a reduced timeframe.
| Stakeholder Concern | Current Issue | Proposed Solution |
|---|---|---|
| One-day lag | Too short, misuse potential | Extended to 30 days |
| Three-month lag | Too long, reduced relevance | Reduced to 30 days |
| Framework complexity | Multiple different periods | Uniform 30-day standard |
Proposed Framework Structure
The consultation paper outlines that the 30-day lag would serve dual purposes of protecting against misuse while keeping educational content relevant and timely. Price data can currently be shared with a one-day lag for preparing content for educational purposes. For using in classrooms and any other media for educational and awareness activities, the data should be at least three months old.
The regulator is now proposing a uniform 30-day lag for sharing price data for all educational and awareness purposes. Persons engaged solely in education will continue to abide by the prohibited activities provisions mentioned in existing circulars, with all other existing provisions remaining unchanged.
Public Consultation Process
SEBI has invited public feedback on the proposal, specifically seeking input on whether the 30-day lag is appropriate for pure educational purposes and if any additional safeguards are necessary while sharing the data. The regulator aims to create a standardized approach that addresses stakeholder concerns while maintaining effective regulatory oversight of market data usage in educational contexts.
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