Is algo trading allowed in India?

Is algo trading allowed in India?

Yes, algorithmic trading, also known as algo trading, is allowed in India. The Securities and Exchange Board of India (SEBI), the regulatory body governing the securities market in India, has put in place regulations and guidelines to facilitate algorithmic trading activities in the country.

SEBI introduced regulations for algorithmic trading in India in 2012, known as the “SEBI (Prohibition of Insider Trading) Regulations, 2015.” These regulations provide a framework for algorithmic trading and set out requirements for market participants engaged in such activities.

Under the SEBI regulations, market participants are required to obtain necessary approvals and adhere to specific guidelines related to risk management, technology infrastructure, and order placement. They must also implement appropriate risk controls, monitor algorithmic trading activities, and ensure compliance with relevant provisions.

SEBI’s regulations aim to promote fair and orderly trading in the market while ensuring the integrity and stability of the securities market in India.