Introduction
In a significant step towards enhancing transparency, data accessibility, and privacy in the Indian securities market, SEBI issued a Circular[i] dated 25.02.2022 (‘First Circular’) outlining the guidelines for accessing and using securities market data in India, according to which all market intermediaries and data providers should make the reporting and disclosure data freely available for download in an accessible format. Additionally, it was stated that any data subject to charges must be clearly identified in the public domain.
The First Circular allowed for the sharing of anonymized, non-public data. Still, as SEBI is not the originator of most market data, the Market Data Advisory Committee (‘MDAC’) identified challenges regarding data authenticity, adequacy and privacy. Based on recommendations of MADC, SEBI issued a Circular[ii] dated 20.12.2024 (‘New Circular’) under s. 11(1) of the SEBI Act, 1992, introducing new guidelines on data sharing policy for research/analysis. The New Circular introduces a framework to ensure uniformity in sharing securities market data by Stock Exchanges, Clearing Corporations, and Depositories (collectively referred to as ‘Market Infrastructure Institutions or MIIs’).
Key highlights and changes introduced by SEBI in the New Circular:
The New Circular aims to enhance transparency, facilitate research, and ensure that critical market information is readily accessible to stakeholders. The key highlights are as follows:
1. Uniform Data Sharing Policy- SEBI, through this New Circular, has introduced a standardized policy for MIIs to share separate data specifically for research or academic publications by accredited academic institutions. Data shared for commercial purposes with vendors does not fall under this policy. This policy divides the data into two categories:
Data that can be shared with the public (First Basket) - It will include aggregate and analysed data, including regulatory reporting and disclosures and exclude sensitive or confidential details. Data that is mandated for reporting and disclosure by regulators falls under this basket. Publicly available data includes:
i. Data publicly available on the websites of MIIs.
ii. Voluminous data that cannot be uploaded on the websites of MIIs, should be mentioned in a separate list.
iii. Researchers can request up to 2 GB of such data annually free of charge, provided no additional computation is required. Fees may be charged for higher volumes or processed data.
Restricted Data (Second Basket)- This includes non-public data that cannot be shared, i.e., data having sensitive information, such as KYC records, trade logs, and entity/individual holding details. It further includes anonymized data that could be used to identify individuals or entities directly or indirectly.
2. Categorization of Data- SEBI had advised all MIIs to classify their data into the above two categories and formulate data-sharing policies in accordance with the same. SEBI has also given examples of data for each category, which are detailed in Annexure I of the New Circular.
3. Approval and Review by SEBI- As per the New Circular, it is required that the MIIs submit the categorized data list under each basket for approval to SEBI within 60 days from the issuance of the New Circular, which will be reviewed annually or as necessary. Moreover, the data in the first basket should be made available in a user-friendly format.
4. Sample Files for Public Access- SEBI has further advised the MIIs to upload sample files on their websites for the data that has been categorized under the first basket.
5. Data Request Form- MIIs will also have to provide a “data request form” on their websites, and any person seeking data will have to justify how the requested data is relevant to their research project and hypothesis.
6. Enforcement: The provisions of the New Circular are effective immediately, and MIIs must ensure compliance within the stipulated timelines.
Our Analysis
Prior to the New Circular, SEBI’s data-sharing policy primarily focused on providing anonymized data that was not publicly available. However, the absence of a uniform framework for categorizing and sharing data across MIIs left room for inconsistency and inefficiencies. SEBI has now taken a decisive step to address this gap by introducing a structured and transparent policy.
Under the New Circular, SEBI mandates a clear segregation of market data into two distinct categories: public data, which is freely accessible, and non-public data, which requires additional safeguards to protect sensitive and private information. This approach ensures clarity and consistency while emphasizing the need for robust data privacy measures.
What makes this circular particularly impactful is its balanced approach; it facilitates greater accessibility for researchers and academic institutions, enabling the testing of hypotheses and fostering informed decision-making without compromising the confidentiality of critical or personal data. By delineating responsibilities to MIIs, SEBI has empowered these institutions to implement policies that align with its broader objectives of transparency and accountability.
In essence, this policy strikes the perfect balance between accessibility and privacy, paving the way for a transparent, research-driven, and trustworthy securities market in India.
End Notes
[i] Circular No. SEBI/HO/DEPA-III/DEPA-III_SSU/P/CIR/2022/25.
[ii] Circular No. SEBI/HO/DEPA-II/DEPA-II_SRG/P/CIR/2024/178.
Authored by Sweta Singh, Advocate at Metalegal Advocates. The views expressed are personal and do not constitute legal opinions.