Sebi Cracks Down on Gaming Apps Involved in Virtual Trading

May 27, 2024

The Securities and Exchange Board of India (Sebi) is keeping a closer eye on fantasy games and virtual trading platforms that use real share prices to mimic stock trading. This action comes after a lot of like-minded apps became famous because more and more regular people are interested in trading stocks.

Regulatory Crackdown

Sebi has told stock exchanges and depositories to stop giving third-party apps that help with virtual trading access to real-time price data. The goal of this directive is to stop people from using data for financial gain on sites that aren’t regulated. Sebi says that it is okay to use this data for educational and fun purposes, but it is illegal to link cash rewards to the outcomes of virtual portfolios, which is similar to “dabba trading.”

Legal and Financial Implications

The exchanges make money by processing trades and selling data feeds. Stock traders get these feeds for free so they can help their clients trade. Sebi’s rules now say that sharing market data for things like schooling has to be put off for at least one day to stop it from being misused. Stock exchanges have also been told to change their legal deals to stop anyone from using live data feeds without permission.

Facts about the Securities and Exchange Board of India (Sebi)

Formation and Regulatory Authority

The Securities and Exchange Board of India (SEBI) was established on April 12, 1988, and gained statutory powers on January 30, 1992, through the SEBI Act of 1992.
SEBI is headquartered in Mumbai and is responsible for regulating the securities market in India.
It responds to the needs of three primary groups: issuers of securities, investors, and market intermediaries.

Innovations and Market Improvements

In 2000, SEBI made Internet dealing possible, which made the securities market easier to get to and more efficient.
Paper shares were thrown out when demat (dematerialized) trading started. This cut down on fraud by a large amount and made dealing easier.
SEBI set up the National Institute of Securities Markets (NISM) in Mumbai so that people who work in the market could get training and licensing.

Investor Protection and Enforcement

SEBI improved safety for investors by creating the SCORES platform, which lets investors file complaints and keep track of them online.
The group has the power to do raids and investigations to make sure people follow the rules and protect the purity of the market.
These steps help make the stock market safer and more open, which boosts investor trust.

More About virtual stock trading games

People can practice investing in fake money in real-time markets with virtual stock trading games, which are also sometimes called “paper trading apps.” This way, they can improve their skills and strategy without risking real money. Investopedia Simulator and other platforms are like real trade platforms. There is also a virtual stock market on MarketWatch. Some models, like Wall Street Survivor, let you learn while competing. Virtual trading lets you try out different ways to spend, like day trading or long-term strategies. A lot of companies, offer simulators to help clients learn how to use trading tools. The game-like features in these apps make it easier to understand complicated financial ideas in a fun way.

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