Indian market regulator SEBI on June 24, announced new norms for exchanges and market intermediaries like brokers prohibiting them from giving "live" data to third party platforms offering virtual trading, a thrilling fantasy game or an educational course. Following this, nearly half a dozen startups that are built around stock gaming are either shutting shop, pausing operations or considering a pivot, reported Moneycontrol.
Meanwhile, the firms that have planned to use dated data are struggling to retain young customers as the adrenaline of live gaming and simulation for either leisure or learning fades away.
As per Moneycontrol, Accel and Kunal Shah-backed Trinkerr has paused its gaming product to contemplate the next course of action. Similarly, Dream Sports-backed fantasy stock app — Investro —has been discontinued and is taking withdrawal requests.
“The broader implications of these regulations seem aimed at curbing illegal data use, and gamification of the stock market. While we support measures to protect investors, an outright restriction on data utilisation might inadvertently restrict access to valuable educational resources that platforms like ours provide,” Trinkerr co-founder Manvendra Singh told Moneycontrol.
Trinkerr has clarified that it has been using data with a five-minute delay and that it has never been a pure gaming app but is also focused on educational aspect.
"Delayed data, especially with the variability of expiry dates in F&O trading, can lead to confusion and detract from the educational experience by introducing inaccuracies in the market conditions that our users study," Manvendra Singh told Moneycontrol.
The Moneycontrol report further added that in the last two years, many stock gaming shops have closed shops unable to make a strong case for stock gaming.
“Changes have been ongoing since the past few years now. We foresaw this circular last year itself and pivoted our business model to other markets,” Shubham Rawal, co-founder and CEO, StockPe, a gamified stock market app told Moneycontrol.
SEBI's crackdown comes amid heightened interest of retail investors, especially in future and options (F&O) besides fear of a growing parallel space outside its purview. Moneycontrol quoted Sanjam Arora, Partner at Trilegal and said that SEBI is concerned about social trading apps potentially bordering on gambling, though some argue they should be seen as skill-based games.
“SEBI is concerned that these apps do not afford users the protections ordinarily available to investors in the securities market. There are also apprehensions that 'gamifying' the trading experience could seed high-risk behaviours among users, which may spill over into trading behaviours in the real world,” she told Moneycontrol.
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