SEBI Delays Retail Algo Trading Framework by Two Months

Capital markets regulator, SEBI, announced a two-month extension for the implementation of a new framework enabling retail investor participation in algorithmic trading, now set to commence on October 1, 2025. This decision follows multiple requests from stakeholders seeking additional time for adaptation.

Until now, algorithmic trading—a method known for its rapid execution and enhanced liquidity—has been exclusive to institutional investors. The February circular from SEBI initially scheduled the new framework to become effective in August 2025, to better integrate retail investors in this trading strategy.

Under the revised rules, retail investors will gain access only to SEBI-approved algorithmic strategies through registered brokers, a move aimed at safeguarding them. Stockbrokers must acquire requisite permissions from stock exchanges before offering algorithmic trading services, ensuring a monitored and secure trading environment.

(With inputs from agencies.)