India’s market watchdog, the Securities and Exchange Board of India (SEBI), has pushed back the deadline again for its new rules on safer algorithmic trading for everyday investors. Stock brokers and algo vendors asked for extra time to tweak their systems, so SEBI agreed and rolled out a step-by-step plan to make things smoother.
The guidelines, aimed at protecting retail investors in algorithmic trading, were originally set to kick in on August 1, 2025. SEBI first delayed that to October 1, 2025, and now they’re spreading it out even more.
Here’s the updated timeline for brokers: By October 31, they need to register at least one retail algorithmic trading strategy using an API with stock exchanges. Next, by November 30, they’ll finish registering their retail algo products and other strategies. Then, by January 3, 2026, every broker must join at least one full mock trading session to test everything.
If brokers miss these steps, they can’t sign up new retail clients for API-based algorithmic trading starting January 5, 2026. The full set of rules, including operational details, will apply to all brokers from April 1, 2026.
Brokers who aren’t ready to launch by October 1 also have to report details about their current clients as of September 30 to the exchanges.
SEBI’s goal with these algorithmic trading regulations is straightforward: spell out the roles and duties for everyone involved—from retail investors and stock brokers to algo providers, vendors, and key players like exchanges, depositories, and clearing corporations.
Under the framework, every algorithmic trading strategy gets registered with a stock exchange and receives a unique ID. This setup lets exchanges keep tabs on orders from Direct APIs. Plus, algo providers must get approved (or empanelled) by the exchange first, and the whole registration happens through a trading member before issuing that ID.
This phased approach should help the Indian stock market adopt safer algorithmic trading practices without major disruptions for retail investors.
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