On Sep. 30, 2025, IND SEBI extended implementation timeline with 3 milestones.
Stock brokers who are ready shall go live with effective from Oct. 1, 2025.
Stock brokers who have yet to carry out the required system changes may follow the following three milestones.
Milestone 1: retail algo product coming through API and at least one algo strategy shall be applied for registration with exchange by Oct. 31, 2025.
Milestone 2: registration of retail algo products coming through API and few algo strategies for retail algo with exchange shall be completed by Nov. 30, 2025.
Milestone 3: stock broker shall participate in at least one mock session with the new functionality which is complete in all aspects by Jan. 3, 2026.
Stock brokers, who are not ready to go live from Oct. 1, 2025, are advised to provide the information re the number of existing clients as on Sep. 30, 2025 to exchanges.
Stock brokers, who fail to adhere to the above milestones, shall be barred from onboarding new retail clients for API based algo trading framework from Jan. 5, 2026.
Algo framework specified in circular dated Feb. 4, 2025 shall be applicable to all stock brokers with effect from Apr. 1, 2026.
On Feb. 4, IND SEBI issued circular on retail investors participation.
IND SEBI issued circular on safer participation of retail investors in algo trading.
Due to increasing demand from retail investors, IND SEBI aims to refine existing reg framework to ensure risk management, investor protection while maintaining integrity.
New regulatory environment defines roles, responsibilities of investors, brokers, algo providers, market infrastructure institutions to facilitate safer retail participation.
Follows IND SEBI Dec. 2021 consulted on algo trading by retail investors, #123746.
Regulatory Framework
Under the new framework, brokers will be the principal entities providing algo trading services, while algo providers will act as their agents using broker-approved APIs.
All algo orders must have unique identifier from stock exchanges for audit, traceability.
Retail investors developing own algos must register with exchanges through brokers if exceed specified order-per-second threshold, can only use them for family members.
Brokers must implement measures such as detecting, categorizing algo orders; restricting API access; ensuring authentication via OAuth, two-factor authentication.
Brokers are responsible for investor grievances and API monitoring; algo providers must be empaneled with stock exchanges, which will define compliance requirements.
Stock exchanges will oversee algorithmic trading, including setting up testing, monitoring algo orders, and having the ability to use a kill switch for specific algo IDs.
Algos will be categorized into white box (execution algos), black box algos, with extra scrutiny for black box algos; existing algo trading provisions remain in effect.
Exchanges are directed to take action including taking necessary steps and put in place required systems and procedures for implementation of provisions of the circular.
Plus, make appropriate amendments to the relevant bye-laws, rules and regulations.
Effectiveness
Implementation standards shall be formulated by Broker’s Industry Standards Forum, under aegis of the stock exchanges and in consultation with IND SEBI by Apr. 1, 2025.
The provisions of this circular shall be applicable with effect from Aug. 1, 2025.
Apr. 2025 Deadline Extended
On Apr. 1, 2025, IND SEBI issued a circular to extend the timeline of formulating the implementation standards by the Broker's Industry Standards Forum (ISF).
Accordingly, the implementation standards shall come into effect from May 1, 2025, while the provisions of above circular shall be applicable with effect from Aug. 1, 2025.
Jul. 2025 Implementation Date Extended
On Jul. 29, 2025, IND SEBI extended the implementation date to Oct. 1, 2025, to ensure a smooth transition, based on requests from stock brokers, ISF participants.
Exchanges are also required to amend bye-laws, rules, and regulations accordingly.
Sep. 2025 Implementation Timeline Revised
On Sep. 30, 2025, IND SEBI extended implementation timeline with 3 milestones.
Stock brokers who are ready shall go live with effective from Oct. 1, 2025.
Stock brokers who have yet to carry out the required system changes may follow the following three milestones.
Milestone 1: retail algo product coming through API and at least one algo strategy shall be applied for registration with exchange by Oct. 31, 2025.
Milestone 2: registration of retail algo products coming through API and few algo strategies for retail algo with exchange shall be completed by Nov. 30, 2025.
Milestone 3: stock broker shall participate in at least one mock session with the new functionality which is complete in all aspects by Jan. 3, 2026.
Stock brokers, who are not ready to go live from Oct. 1, 2025, are advised to provide the information re the number of existing clients as on Sep. 30, 2025 to exchanges.
Stock brokers, who fail to adhere to the above milestones, shall be barred from onboarding new retail clients for API based algo trading framework from Jan. 5, 2026.
Algo framework specified in circular dated Feb. 4, 2025 shall be applicable to all stock brokers with effect from Apr. 1, 2026.
