Brokers struggle to meet Sebi deadline on retail algo trading

Stockbrokers are scrambling to meet a series of cascading regulatory deadlines to implement new algorithmic trading rules for retail investors, a landmark shift that promises to democratize sophisticated trading tools but has triggered technical and compliance hurdles.

- Dipti Sharma & Neha Joshi

Sebi's new regulatory and technological changes are aimed to make algorithmic trading safer and more transparent.

(ISTOCKPHOTO)

The Securities and Exchange Board of India (Sebi) on 4 February mandated all brokers to provide algorithmic trading facilities to retail traders. Originally slated for a 1 August rollout, the massive re-engineering required forced Sebi to extend the deadline twice and set up a phased implementation. Brokerages had to register at least one algorithmic product by 31 October and must submit any additional ones by 30 November. A mock testing phase is scheduled until 3 January, 2026. The full regulatory framework is expected to be in force for all stock brokers from 1 April, 2026.

The regulations are aimed at making algorithmic trading safer, more transparent, and more accountable. Market participants, while straining to meet the mandates, largely agree that the phased deadlines are necessary to grasp the urgency and adapt to the new framework smoothly.