Algo Trading and the New Sebi Rules for Investors

The underlying reasons for the success of mutual funds (MFs) in India have been twofold—promise of steady returns and extreme convenience as they worked in an auto-pilot mode.

- Gopesh Mittal & Kishan M. Nair

Equity, on the other hand, needed investor intervention for each individual trade.

With new Securities and Exchange Board of India (Sebi) regulations on algorithmic trading, this will no longer be the case. The possibility of automating execution for equity is transformational and can open the floodgates for retail participation.

Clear win Retail investors have long struggled with stock selection and timely execution, lacking time, tools, or expertise for in-depth research. While Sebi emphasized creating research and advisory ecosystems, execution remained a major bottleneck.

Algorithmic trading under the new framework solves the execution hurdles.

It offers seamless automation where algorithmic decisions execute directly in investor accounts without manual intervention—except login.