Retail Investors Enter the Algo Trading Arena

The Securities and Exchange Board of India (Sebi) has opened algorithmic trading to retail investors, previously exclusive to institutional investors. The move ensures improved market integrity and investor safeguards. Retail investors can access approved algos via registered brokers, and exchanges will supervise these activities to maintain market transparency.

The Securities and Exchange Board of India (Sebi) has announced that retail investors can now participate in algorithmic trading, a domain previously reserved for institutional investors. This move is expected to provide benefits such as faster order execution and enhanced liquidity in the capital markets.

The regulatory body introduced a new framework to protect the interests of retail investors and maintain market integrity. The framework outlines responsibilities of investors, brokers, and market infrastructure players, and will be effective from August 1, according to Sebi's circular.

Brokers will facilitate algo trading for retail investors, only with necessary permissions from stock exchanges. Exchanges will maintain a keen oversight on algorithmic activities, ensuring compliance and transparency in the market.

(With inputs from agencies.)