- Retail investors’ algorithms had to be made through the brokers and registered with the exchanges.
- Algorithms execute trades purely on pre-programmed instructions, which are linked to price movement and volumes.
- Open APIs for such things as order placements, fetching data and back testing strategy are not allowed for brokers.
- Brokers could only work with empanelled algo providers plus handling the related complaints.
They also need to have vendor identification and traceability measures.
- Stock brokers shall provide algo trading facilities only after obtaining permission from the stock exchange.
- An algo order will be identified by a unique identifier to be provided by the exchange
- It proposes to have measures to avoid “misfire” in the market from its end.
- It has proposed that all such algo providers be registered as research analysts.
- Sebi has been confronting brokers whose clients use plugins from algo platforms that offer so-called guaranteed returns.
