SEBI Proposes 30-Day Lag on Market Price Data for Investor Education

India’s market regulator, Securities and Exchange Board of India (SEBI), has proposed a uniform 30 day time lag for sharing and using price data in investor education and awareness programmes. The proposal seeks to balance the need to prevent misuse of sensitive market data while keeping educational content timely and meaningful for investors.

Why in News?

SEBI has released a draft proposal suggesting a 30 day lag on market price data for investor education. The move aims to address concerns over data misuse and outdated learning material.

About The New Proposal

• The proposed framework introduces a single 30 day time lag for both sharing and usage of stock price data for educational purposes.
• This replaces the current system where exchanges could share data with a one day lag, while educators were restricted to using data that was at least three months old, creating inconsistency and confusion.

Why SEBI Felt a Change Was Needed

• Stakeholder feedback highlighted issues at both ends of the existing system.
• A one-day lag was seen as too short and vulnerable to misuse, while a three month delay made educational content outdated and ineffective.
• SEBI believes a 30 day lag is sufficient to protect exchange data without compromising the relevance of investor education material.

Education vs Investment Advice Concern

• SEBI has cautioned that the use of live or near real time price data in educational content may blur the line between education and investment advice.
• Analyzing current prices or predicting future movements falls under investment advisory or research activities.
• Also which require registration and compliance with stricter regulatory norms.

Safeguards and Compliance Requirements

• Under the proposal, all existing safeguards from earlier SEBI circulars will continue to apply.
• Entities engaged solely in education must comply with restrictions laid down in the January 2025 circular, particularly avoiding any content that could be interpreted as recommendations or advisory services.

Background of This Change

• SEBI regulates India’s securities markets to protect investors and ensure fair practices.
• In May 2024, it tightened norms on real-time data sharing to curb misuse by online gaming platforms and unregulated apps.
• A further clarification in January 2025 imposed a three month lag on educators, which this new proposal seeks to rationalize.

About SEBI – Key Points

• Type: Statutory regulatory body for India’s securities market
• Purpose: Protect investor interests, regulate and develop the securities market, ensure market transparency and fairness

Historical Background

• Before SEBI: Indian securities market regulated by Controller of Capital Issues (CCI) under Capital Issues (Control) Act, 1947
• Establishment: SEBI formed in 1988 due to growing market malpractices and investor grievances
• Statutory Powers: Granted in SEBI Act, 1992, after the Harshad Mehta scam exposed loopholes in the market

Key Summary at a Glance

Question

Q1. SEBI has proposed what time lag for sharing and using price data for investor education?
A. One day
B. Fifteen days
C. Thirty days
D. Three months