Question about Sensibull's Copy Trading platform

I got an email about @Sensibull launching a copy trading platform - https://web.sensibull.com/ideas-forum

After reading the recent Z-connect blog post & forum thread (Stock trading games & copy trading platforms in India?), I was of the opinion that getting regulatory approval for copy trading platforms is very difficult.

Has Sensibull successfully gotten regulatory approval for this new functionality?

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Don’t ask such things!! :wink:

Most probably some envious enemies of Zerodha are there in NSE, SEBI etc.
So they “advise” zerodha against implementing any such things. There are multiple such instances in the past.
Open Trade was zerodha’s own - closed.
AlgoZ, 60days moneyback, …

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Did you read this post?

Like I have mentioned in the post if the platform needs to collect the fees each person sharing the idea has to be a RA/RIA. Which is what Sensibull has done.

Also like I have mentioned in the post, this isn’t really a copy trading platform in the true sense. You are essentially getting advice from the RA and then you are manually executing orders. True copy trading platforms, this happens automatically. This isn’t possible regulatory.

The platform where anyone can share trading ideas is free on Sensibull. Because only RA/RIAs can share trading ideas for a fee. Not normal individuals.

@maddy_Des I hope you get the point. Opentrade was a platform for normal individuals and we couldn’t collect a fees as they were not RA/RIA and hence had to shut it down.

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A little different query, how can platforms like sensibull or say smallcase provide order execution services to their users. Yes they are may be rigistered RIAs but i remember you mentioning that RIAs cannot provide trade execution services to their clients. What they have is clients agree to their terms and conditions, so suppose if some RIA has infrastructure ready he too can provide order execution services. What I am missing here?

By trade execution, if you mean a buy/sell button + market feeds, anyone who offer this. As long as you can partner a broker and go to the exchanges and get approval for the trading platform built by RIA or anyone. That is what smallcase/sensibull/streak etc have done. The easier way to do it is actually embedding our publisher button.

The issue though with publisher is that you have to tie up with an exchange data vendor to display market feeds as it is not an exchange approved trading platform.

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So does this mean that because Sensibull doesn’t allow these traders/advisors to charge a fee from the users, Sensibull becomes exempt from the regulatory approvals which might have been required for a full-fledged copy/social trading platform?

I had indeed overlooked that Sensibull explicitly mentioned that none of these traders are SEBI registered intermediaries and their trades ideas are only for sharing/education purposes in an internal page (https://web.sensibull.com/ideas-forum-feed)

The traders here are not SEBI registered intermediaries. These ideas are not trade recommendations. They are for the purpose of sharing trade ideas/ education purposes. Please consult SEBI registered intermediaries for investment advice

But I had a query for the @Sensibull team. Will this feature remain free/open for everyone? I ask because I noticed that on the landing page, it is mentioned that this will remain free from Diwali till December -

If Sensibull brings this feature under its paid plans, wouldn’t it become a problem because even though the traders/advisors aren’t directly charging the users for their trade ideas, but Sensibull is charging the users for accessing these trade ideas? Also, I wanted to ask, does Sensibull give any monetary benefit to the traders/advisors for publishing their trade ideas on Sensibull?

In case, there are no benefits for the traders/advisors, why would anyone share their profitable trade ideas? Is it mainly for garnering credibility so that they can launch their investment advisory services in the future?

Personally, I like this feature because Twitter has become a wild west of investment advice where most of the people are only making a profit (as all loss-making ideas are deleted). An impartial platform that allows verifying a person’s trade history and validating their trade accuracy is indeed a good initiative. I am just confused about the regulatory requirements

On a different note, how did you get the regular badge? I see very less people here have that

This post on the Discourse official blog explains it in detail

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The place where normal traders share their idea, I am guessing it will remain free forever. It almost then becomes a twitter like platform. The paid bit will be where RA/RIA share there ideas. But yeah, the Sensibull team can maybe clarify.

This is the same reason people share ideas on twitter, MC, Tradingview, Stocktwits, blogs, TV/Media, etc. :slight_smile:

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I don’t think that even if sensibull charges fees to access the feature, it would be regulatory problem. What they can’t do is directly pay the traders sharing a idea. Think of this as a application that requires fees paid to be accessed or premium subscription.

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Sorry @Prayag @Prakhar_Agrawal I missed the party. Was traveling without network, and away from internet.

Thanks @nithin for taking care of questions.

Like Nithin mentioned, we will pay the SEBI registered advisors a fee for advice. But the people without a license cannot be paid anything, at least in our knowledge of regulations, yet. We want to keep the possibility of that open, hence the message free till December. If we do not get a clear mandate that charging is okay, we will not charge. But then, it looks like we can charge, but cannot pay advisors.

That said, I’d really like to monetize this for two reasons. One, it helps us fuel this business, and I think every business should be sustained but it’s own p and l. That will help us pump more resources to this. Also if people pay for something, they will be more serious about yelling at us in case something goes wrong :slight_smile: . For example we kept WhatsApp alert free, so even on occasions there is something wrong, no one cribs because it’s free. All great products are born because a user is unhappy.

Why would the good guys share ideas? I don’t know. But I’m not willing to give up on some people’s fundamental desire to do something good for others and get some appreciation yet. Quora, Wikipedia etc etc are examples of this. Hope we can pull something like that off and clean up the wild West :slight_smile:

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A regular in any 1 diacourse forum makes the user regular in all other discourse forums as well?