SEBI circular on algo trading and it's impact

I read news on moneycontrol where in SEBI is bringing in some controls around broker APIs. Will there be any impact on individual retailers who are using APIs for trading in their personal account?

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How will this impact indie devs like us who are building strategies for personal use? And, how is dhan planning to handle this situation? Any insights would be helpful.

@PravinJ @Hardik

@softice @sv28

We are in the process of following up on the reports, and we will share our thoughts tomorrow. :slight_smile:

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@sv28 Based on the Article,

As the SEBI enforces the regulations on algo trading, all open APIs where the broker is unaware of the information about where it is being used by the client would be stopped on an immediate basis. Under the proposed regulations, the broker must be aware of the source of the order at all times.Execution algos will be allowed if the client is aware of the strategy completely. Clients should have complete knowledge of what exactly is happening in the algos. Such information should be available in plain English for better understanding by any client.

If you are an individual trader who has developed your own algorithmic system, there should be no issue, as you are fully aware of how your system processes data and executes trades. Similarly, the @Dhan Team is also informed about the orders you place. There are specific limits in place for order and Data API usage.

Unless SEBI requires individual retail traders who utilize algorithms to share the details of their algos with their brokers, the situation remains unchanged. However, I firmly believe that these measures are intended to curb the actions of bad actors who create undue disturbances in the market.

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Wrote an email to SEBI to highlight the impact of indie devs like me. Please write email to the authorities directly because this is the max we can do at this point.

Ref for email address: https://www.sebi.gov.in/orgchart-grid.html

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Really hope that you are right

All this Algo Fiasco reminds me this documentary and it could be one probability behind this action from SEBI.

and such things happened with us as well in 2012.

Hey @Sammy @sv28

First of all, there is no official circular from SEBI or exchanges as of now on the points mentioned in the article. There is obviously need of clarification from regulators to be able to comment here.

There is no source of information provided in the article as well. APIs in the current form used by individual traders should not get affected. Again, awaiting for direct communication from regulators first before drawing any conclusions.

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We also have an ongoing discussion here on the API-based trading / Algorithmic Trading platforms :point_down:

Hope it’s not the case but I got concerned when I saw this. The person saying this is one of the members of the committee by SEBI

Hi @sv28 Let’s wait for the circular to be out, yes I saw that thread. I hope this is some misunderstanding… I understand platforms will have a verification agency if they claim returns and all, sounds fine there… but individual algo traders not able to code their own is a bit overboard.

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