SEBI News: SEBI's new decision on algo trading: Deadline extended, but crackdown on brokers will increase further!:

News Topical, Digital Desk : Market regulator Securities and Exchange Board of India (SEBI) has extended the deadline for implementing rules to make algorithmic (algo) trading safer for retail investors. This will give stock brokers more time to update their systems. SEBI had originally planned to implement these rules from August 1, but it was postponed to October 1.

Many brokers are now taking time to update their systems based on recent changes and clarifications from stock exchanges. In light of this, SEBI has further extended the deadline. SEBI stated that brokers who have already prepared their systems can begin implementing them from October 1st.

Other brokers will need to follow a phased plan:

By October 31: At least one retail algo product must be offered via API and at least one strategy must be registered with the exchange.
By November 30: Registration of several retail algo products and strategies must be completed.
By January 3, 2026: Must participate in at least one mock session with fully compliant functionality.

What will happen if the rules are not followed? SEBI has warned that brokers who fail to meet these deadlines will be barred from adding new retail clients for API-based algo trading from January 5, 2026. Stock exchanges have also been tasked with monitoring brokers' compliance. Brokers who fail to start by October 1 will be required to disclose the number of their existing clients by September 30, 2025, in a format prescribed by the exchanges.

When will the full framework be implemented? SEBI has clarified that these rules, including their implementation standards and operating procedures, will be fully implemented for all brokers from April 1, 2026.

What is SEBI's objective? This move by SEBI aims to help retail investors participate in algo trading in a safe and transparent manner. Brokers have been given time to strengthen their systems and protect investor interests to maintain market confidence. This step will not only benefit investors but also help make the stock market more organized and secure.