The Tussle Between SEBI And Exchanges

Ever since her return to India’s market regulatory authority, Madhabi Puri Buch has put one of her key initiatives back on agenda: data democratisation.

“We will get the data uploaded on our site and make it available for free. You do whatever you want to thereafter…,’’ Buch, chairperson of the Securities and Exchange Board of India, said on Wednesday at the Global Fintech Fest. She was referring to a discussion with exchanges on making data and information filed as part of the regulatory process free for everyone.

Buch had kicked off the project in 2021, towards the end of her tenure as a wholetime director. While she did face resistance, she managed to sign off on it just before her term ended.

Yet, it was not pursued after she left. 

Earlier this year, when Buch returned to SEBI as chairperson, data democratisation was back on the agenda. 

The regulator formed a SEBI Market Data Advisory Committee comprising SEBI and market intermediaries. The panel had the mandate to recommend policy measures in areas such as securities market, data standardisation, access, and privacy. Discussions have turned lively between the regulator and the exchanges. 

So why do exchanges appear to be reluctant? The answer is simple.

Data is money and a significant portion of their revenue is now linked directly to the sale of disclosed data that is provided for a fee in a machine-readable and analysis.

The regulator, on the other hand, is clear. Data does not belong to the exchanges. They receive this data or information under the disclosure regulations of the market regulator and, hence, all data has to be available to all. 

Data Is Public Infrastructure

Buch has spoken on the issue at two public events since taking charge as the capital market regulator. 

“In India, we have a stated objective and implemented evidence that the infrastructure for innovation will be a public good,” Buch said on Wednesday.

“The rails will be a public good. Private innovations need to be built on top of those rails,” she said. “If somebody has a business model, where the presumption is that they will own the infrastructure, you are setting yourself for a rude shock subsequently.”

“The market thrives on data, and we have ensured by actually issuing a circular that every piece of data which is there in the markets, on account of something that the regulator said, that it must be disclosed, has to be available free of cost and in a machine readable and downloadable format and cannot be charged for.”  

During a discussion with the exchanges, Buch said she was told that they were willing to give data to investors for free, but if a service provider wanted the same data, they would charge for it.

The regulator responded that SEBI will issue a circular saying that all data, instead of being uploaded on the exchanges, will be uploaded on the SEBI website and it will be offered for free.

Then, “aap ko jo karna hai, woh aap ki marji (What you need to do is up to you),” she said. 

According to Buch, data is a public good and public infrastructure, and “no private person can claim ownership over this infrastructure”.

“We will ensure that it is made publicly available in any file, form or manner. You want a feed, API, etc., everything is free, and nobody can charge you for this,” she said.

On Sept. 5, the exchanges came out with a joint statement based on the decision of the Market Data Advisory Committee that XBRL (language of electronic communication) would be implemented for all corporate filings. 

“The stock exchanges have implemented new XBRL-based compliance filing mechanism featuring identical and homogenous compliance data structures, which will not only for companies ease the compliance burden on listed entities, but would also enable analytics on the data submitted by the listed entities,” the joint statement said.

The XBRL filings for 14 disclosures from financials to shareholding, and annual reports will be provided to investors. 

These steps shall enhance the transparency and efficiency of corporate information for “investors”, the exchanges said.

All good so far, except the exchanges didn’t share the URL where these XBRL links could be found.

BQ Prime reached out to the exchanges to get access to these XBRL formats.

After repeated requests, the NSE provided disclosure page link for eight of the 14 disclosures on the website with separate XBRL link for individual companies. The BSE responded with links of the company disclosure page on the BSE website, which provides access to single company disclosure at a time.

Providing separate data links for over 2,000 companies on the pretext of data democratisation is just a ‘tick the box’ approach and not what SEBI is actually trying to achieve. Exchanges need to provide a single link or applications that allow users to easily download machine-readable data of all companies for analysis.

The market regulator wants to ensure that market-disclosed data is public infrastructure, but exchanges are reluctant to provide it in a format that can be consumed by the public easily.

But things are set to change.