On December 20, 2024, the Securities and Exchange Board of India (SEBI) issued an important circular addressing the policy for the sharing of data by Stock Exchanges, Depositories, and Clearing Corporations. This circular introduces a uniform approach for sharing data specifically for research and academic purposes. The policy is designed to balance data privacy with the need for open access to market data for research and analysis.
The circular sets clear guidelines on how market infrastructure institutions (MIIs) should segregate data into two categories and share it with accredited academic institutions, while ensuring that sensitive and personal information remains protected.
Implications of the Circular
Promoting Research and Academic Excellence: This policy is likely to foster a culture of data-driven research in India’s financial markets. By providing access to key market data, SEBI aims to encourage more academic institutions to engage in research on market dynamics, trading behavior, and financial modeling. Researchers can leverage this data to produce valuable insights that can inform both academic discourse and policy decisions.
Increased Transparency and Accountability: By ensuring that anonymized data is made available publicly for research, SEBI is promoting greater transparency in the Indian securities markets. It also provides a mechanism for independent researchers to analyze and verify market trends and behaviors, fostering accountability within the market infrastructure.
Balancing Data Privacy and Access: One of the most significant aspects of the circular is its focus on data privacy. While encouraging data accessibility, SEBI has been mindful of the need to protect sensitive information related to individual traders, entities, and market participants. The segregation into two baskets ensures that private and confidential data is safeguarded, while still enabling valuable public and academic access to market data.
Support for Regulatory and Policy Development: The shared data will not only benefit academic institutions but also assist SEBI and other regulators in monitoring and evaluating the effectiveness of market regulations. Insights from research can inform future regulatory changes and market reforms.
Conclusion
SEBI’s new circular on data sharing for research purposes is a progressive step toward creating a transparent, data-driven research ecosystem in India’s financial markets. By facilitating access to anonymized data, SEBI is enhancing the ability of researchers to contribute valuable insights into market behavior and sustainability, while still maintaining a robust framework for data privacy. This policy not only supports academic excellence but also strengthens the overall governance and transparency of the Indian securities market.
