SEBI mulls regulatory framework for algo trading by retail investors

Capital markets regulator SEBI on Thursday proposed regulatory framework for algorithmic trading (algo trading) by retail investors to make such trading safe and prevent market manipulations. In its consultation paper, the regulator has proposed framework for algo trading done by retail investors including use of Application Programming Interface (API) access and automation of trades.

"This kind of unregulated/unapproved algos pose a risk to the market and can be mis-used for systematic market manipulation as well as to lure the retail investors by guaranteeing them higher returns. The potential loss in case of failed algo strategy is huge for retail investor,” SEBI said.