SEBI Proposes Rules for Retail Algo Trading
On 9th December, 2021, Capital markets regulator Securities and Exchange Board of India (SEBI) proposed a regulatory framework for algorithmic trading (algo trading) by retail investors to make such trading safe and prevent market manipulations.
Need for Formulating a Regulatory Framework
- At present, though the broker can identify the orders emanating from an Application Programming Interface (API), they are unable to differentiate between an algo and non-algo order emanating from an API.
- Unregulated/unapproved algos pose a risk to the market and can be misused for systematic market manipulation as well to lure the retail investors by guaranteeing them higher returns.
- The potential ....
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