The Securities and Exchange Board of India introduced a revised regulatory framework to allow retail investors to participate in algorithmic trading, which was previously only permitted for institutional investors.
The framework will take effect Aug. 1, according to a Feb. 4 circular.
Investors can access algorithms via registered stock brokers, which will facilitate algorithmic trading through APIs. Algorithm providers will not be regulated by the watchdog but must be empaneled with the stock exchanges.
The regulator said stock exchanges must establish a standard operating procedure for testing and monitoring algorithms. They must also define the roles of brokers and the criteria for empaneling algorithm providers.
