SEBI has proposed a regulatory framework to enable retail investors to participate in algorithmic trading safely and transparently. The framework mandates API-based algo trading, categorises algorithms into White Box (transparent) and Black Box (restricted), and defines roles & responsibilities for brokers, exchanges, and algo providers. This article explores several key focus areas, including:
‣ Meaning of Algorithmic Trading
‣ Current Regulatory Landscape
‣ SEBI’s Rationale for Extending Algo Trading to Retail Investors
‣ Proposed Framework and Safeguards
‣ Opportunities for Retail Investors
‣ Risks and Challenges in Algo Trading
‣ Implementation Timeline and Next Steps
