SEBI pushes back retail algo trading framework, sets phased rollout till April 2026

New Delhi, Sep 30 (IANS) The Securities and Exchange Board of India (SEBI) on Tuesday once again extended the timeline for implementing its framework on “Safer participation of retail investors in algorithmic trading.”

The regulator said stock brokers will now get more time to comply with the new rules after many brokers and algo vendors requested additional time to make system-related changes.

The framework, which was earlier supposed to come into effect from August 1, 2025, was first postponed to October 1, 2025.

SEBI has now introduced a phased roadmap for implementation to ensure a smooth rollout.

As per the new schedule, brokers must apply for registration of at least one retail algo strategy through an API by October 31.

They will have to complete registration of retail algo products and some strategies by November 30 and participate in at least one full-fledged mock trading session by January 3, 2026.

Brokers who fail to meet these milestones will not be allowed to onboard new retail clients for API-based algo trading from January 5, 2026.

The entire framework, along with detailed operational standards, will become effective for all brokers from April 1, 2026.

Brokers who are not ready to go live by October 1, will also have to submit information about their existing clients as of September 30, to the exchanges.

SEBI said the guidelines aim to clearly define the rights and responsibilities of investors, brokers, algo providers, vendors, and market infrastructure institutions such as exchanges, depositories, and clearing corporations.

Under the rules, all algorithmic trading strategies will need to be registered with stock exchanges and assigned a unique identification.

This mechanism will help exchanges track algo orders placed through Direct APIs. Algo providers will also have to be empanelled with the exchange before registering their products, and the process will have to be done through a trading member before an algo ID is issued.

--IANS

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