SEBI recently published a consultation paper on algo trading for retail investors.

My understanding of it is it should be ok for savvy traders using APIs for individual trading with some reasonable order limits. But the APIs have to be accessed through only static IPs, but this isn’t hard to get.

But platforms that offer algos or readymade strategies will need to get them approved through the broker. The broker, in turn, has to register all algos and strategies with the exchanges.

The broker also has to ensure that customers are following the same strategies that were registered. That means brokers will have to build and offer the infrastructure for people to run their algos and ensure compliance.

We wrote about the consultation paper on Markets by Zerodha recently.

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