The Securities and Exchange Board of India (SEBI) has introduced a new regulatory framework for algorithmic (algo) trading by retail investors. The circular, issued on February 4, 2025, aims to enhance security, transparency, and accountability in algo trading by defining the roles of brokers, exchanges, and algo providers.
SEBI noted the rising demand for algo trading among retail investors and emphasized the need for strong checks and balances. Under the new rules, brokers will be responsible for managing algo trading services, ensuring proper authorization and monitoring of automated orders. Retail investors developing their own trading algorithms must register them with stock exchanges if they exceed a specified order-per-second threshold. The new framework also mandates brokers to work only with empaneled algo providers and implement strict authentication processes to prevent unauthorized access.
Exchanges will oversee the implementation, requiring brokers to tag all algo trades with unique identifiers for better tracking. Additionally, SEBI has introduced two categories of algorithms—white box (fully transparent execution algos) and black box (proprietary logic-based algos). Black box algo providers must register as Research Analysts and maintain detailed reports for regulatory review.
The new regulations will be implemented from August 1, 2025, with detailed standards set by April 1, 2025. SEBI has directed stock exchanges to take necessary steps to comply with these guidelines, ensuring a more secure trading environment for retail investors.
Disclaimer: The information provided is for educational purposes only and does not constitute financial advice. We are not registered financial advisors. Please conduct your own research and consult a qualified advisor before making investment decisions. Any investment decisions you make based on this information are solely at your own risk.
Also read: Indian Markets on 3rd Feb: Markets Struggle Post-Budget, End in Red
Published on: February 3, 2025 at 8.00 PM GMT.
Well Construction Challenges for Farmers due to Subsidy Disbursement Period:
The timing of subsidy disbursement has recently made farmers face problems while constructing deeper wells. The subsidy on well construction is disbursed during February, when the groundwater level is maximum. This forces the farmers to dig wells at this particular time, thus reducing the depth and rings that can be put into the well. If the subsidy were available in March or April, when water levels recede, they could dig deeper wells, ensuring better water availability for agriculture.
As stated in Bhagavad Gita : (Bhagavad Gita 4.7)
यदा यदा हि धर्मस्य ग्लानिर्भवति भारत।
Whenever there is a decline in righteousness and an increase in unrighteousness, O Bharata, at that time I manifest Myself.
5th February is celebrated as National Girls and Women in Sports Day!
