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SEBI
April 8 , 2018
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- The Securities Exchange Board of India (SEBI) has relaxed algorithm trading norms at commodity derivatives exchanges.
- The market regulator has raised limit of trading using algorithm trading process up to 100 orders per second by user from the existing limit of 20 orders per second.
- The decision was taken after receiving representations from exchanges along with views of SEBI’s subcommittee- Commodity Derivatives Advisory Committee.
- SEBI has asked exchanges to ensure that limit provided by it is subject to its ability to handle load
Algorithmic trading
- It was introduced in India in 2009. Algorithmic trading in financial markets refers to transaction orders generated by using advanced mathematical models that involves automated execution of trade.
- It uses mathematical models and software codes to make transaction decisions on exchanges and execute them at high speed.
- At present, on National Stock Exchange (NSE), algorithm trades accounts close to 16% of all trades. On the Bombay Stock Exchange (BSE), it was 8.56% in January 2017.
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