Broad guidelines on Algorithmic Trading

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....c Trading'. 2. SEBI has received various suggestions with regard to the requirement of system audit of trading algorithm / software used by stock brokers / trading members. After due examination of the suggestions in consultation with the Technical Advisory Committee, it has been decided to revise the requirement as follows: 2.1. The stock brokers / trading members that provide the facility ....

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....fication Consortium, commonly known as (ISC)2. 2.3. Deficiencies or issues identified during the process of system audit of trading algorithm / software shall be reported by the stock broker / trading member to the stock exchange immediately on completion of the system audit. Further, the stock broker / trading member shall take immediate corrective actions to rectify such deficiencies / issues....

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....ective monitoring and surveillance of orders and trades resulting from trading algorithms. Stock exchanges shall periodically review their surveillance arrangements in order to better detect and investigate market manipulation and market disruptions. 4. As directed vide circular dated March 30, 2012 stock exchanges have implemented a framework of economic disincentives for high daily order-to-t....

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....aily order-to-trade ratio, provided penalty was imposed on the stock broker / trading member on more than ten occasions in the previous thirty trading days. 6. The circular shall be applicable with effect from May 27, 2013. 7. Stock Exchanges are directed to: 7.1. take necessary steps and put in place necessary systems for implementation of the above. 7.2. make necessary amendments to ....