SEBI Eases Algorithmic trading Rules

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Algorithmic trading or ‘Algo’ in market parlance refers to orders generated at a super-fast speed by use of advanced mathematical models that involve automated execution of trade, and it is mostly used by large institutional investors.
It uses mathematical models and software codes to make transaction decisions on exchanges and execute them at high speed and enables traders to take advantage of any profit making opportunities.
Algo trading was introduced in India in 2009.
Presently Algo trading occur at two stocks in India, National Stock Exchange (NSE)and Bombay Stock Exchange (BSE).

In a bid to relax algorithm trading norms at commodity derivatives exchanges, markets regulator Securities and Exchange Board of India (SEBI) has raised the limit to process up to 100 orders per second by a user for such trade from the existing limit of 20 orders per second.
The decision has been 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.
Besides, it also has decided to do away with requirement of empanelment of system auditors by the exchanges for system audit of algorithmic trading.