Hello Everyone,
Algo Trading has been popular for a long time in the Indian markets, especially amongst institutions. At Dhan, we have worked from our initial days to build an ecosystem for Algo Traders, ensuring they can access the same infrastructure that the institutions access, whether that be for data or execution speeds delivered via DEXT.
While the retail trading community has been growing who have built their trading systems on top of our APIs, there was uncertainty on regulations around APIs and how algo trading will continue.
But now, with the recent SEBI circular on Safer Participation of Retail Traders in Algorithmic Trading, we have a clear directive on how this is going to be regulated soon. While the circular itself is quite extensive with all the operational modalities, there are only few pointers that a retail trader needs to ensure at his end while using APIs for trading.
Here’s a complete breakdown of the circular and what you have to ensure to continue using APIs, post the new circular implementation.
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Threshold for Order Placement:
With the new regulations, all API orders are treated as algo orders. Also, if a user places less than 10 orders per second, then it does not require a registration at the exchange as an Algo.
To ensure simplicity for all users, we are making the rate limits on Order APIs at 10 requests per second. Do note that GET APIs, which you use for getting status of orders and trades remain separate.
We will have a separate portal in place soon for users who want to register their algos, in order to place more than 10 orders per second. -
Static IP whitelisting:
As an API user, you need to provide a Static IP (you can add one as a backup IP as well), in order to continue using DhanHQ APIs. As per the regulations, this is for us as a broker to identify unique individual users who are using APIs to transact and no two users are using the same IP address at the same time in our system.
Few points to keep in mind here: Firstly, static IP is not the same as what we get as our WiFi IP address - that is a dynamic IP and it changes every time you restart the router. Static IP is provided by ISPs or cloud service providers on request. You need to get the IP address and add it on the DhanHQ API access page. Once added, you do not need to worry about this again, until your IP changes.
Do note that it will be allowed to change IP only once every 7 days. Also, we will only check for IP when the Order Placement APIs are used. -
New Authentication Mechanism:
For simplicity and with the changing regulations, we are bringing an API Key based authentication as well. At Dhan, we have an access token module, which is simple and safe - to generate a token right from the platform for self use.
Now, we are also adding an alternate method of authentication - which is API Key based login. API Key and Secret can now be used to create sessions to access API along with TOTP.
This has been a request on this community as well for some time, and we are finally introducing this as an option for API authentication.
Other than these, for all users who use our partner platforms to trade manually or by automating, we are working with our ecosystem partners to ensure that you can continue using them without any blockers.
While we have just summarised the parts of the regulation which are applicable to you, wherein your algo trading journey is being altered, there’s a lot more in the regulations than this. Let’s take a look at the timeline of events and how the Algo Regulations have been shaped up:
- Feb 04, 2025 - SEBI introduced circular on ‘Safer participation of retail investors in Algorithmic trading’ vide circular no. SEBI/HO/MIRSD/MIRSD-PoD/P/CIR/2025/0000013. This was planned to be implemented from 1st August, 2025
- May 05, 2025 - Exchanges released circular inline with SEBI’s master circular on implementation of the guidelines.
- July 22, 2025 - Exchanges release details for operational modalities related to implementation of circular across ecosystem
- July 29, 2025 - SEBI released an extension for implementation of the circular to 01 October, 2025.
On the backdrop of this, we at Dhan, are also trying to make APIs more accessible for all retail traders, whether that be in respect of data or execution. We are building some unique APIs, which will make your algo trading journey much simpler and easier despite these new regulations.
Moreover, to reward our long term users of Data APIs, we are also introducing a yearly plan, where you subscribe once and enjoy using Data for the entire year. This is at a much lower rate of ₹399 per month, effectively 20% benefit. Not just this, with this same plan, we are also soon adding more data capabilities to make this deal sweeter.
As the regulations add guardrails to Algo Trading, we are sure this will act as a catalyst for algo traders and help us build this ecosystem even better. At Dhan, we are committed to ensuring compliance whilst building a seamless experience for you.
Do let us know your feedback on the new regulations, changes and how we can make all of this more seamless.
Happy Trading on APIs!
Hardik