Sebi forms new rules for retail investor algo trading; unique ID required for all algo deals

Market regulator Sebi today (Tuesday, February 4, 2025) issued new rules for retail investor algo trading.

Rules will come into effect from August 1, 2025, broker ISF will prepare a blueprint by April 1.

As per Securities Exchange Board of India's (Sebi) new rules, from now onwards, a unique identity will be required for all algo deals.

As per the rules, permission from the exchange will be required for every algo.

The registration is mandatory for high-volume orders by retail investors.

Technical preparation of brokers is necessary. At the same time, the open API will not be exempted.

A 2-factor authentication of API has been made mandatory for all brokers.

Retail investors can now work only with vendors empanelled by the exchange.

Other than that, brokers will be responsible for resolving complaints of algo trading.

Vendors will be considered agents of the broker for algo trading through API.

The exchange, on the other hand, will be responsible for monitoring all algo deals.

There will be two categories of algos, white box and black box.