Summary of the NSE Circular (Ref. No. NSE/INVG/67858, dated May 5, 2025) Algo Trading
Key Implementation Standards:
A. API Access for Clients
•Clients must use static IP addresses for trading APIs.
•One primary and optional secondary static IPs are allowed.
•Multiple API keys can be issued, each tied to specific IPs.
•Static IPs are mandatory for all client-initiated algos, broker-generated algos, and those via empanelled providers.
•Static IP updates are allowed once a week, with exceptions under special cases.
•Static IPs can only be shared within a family (as per SEBI definition).
•Daily logout of API sessions is compulsory.
B. Use of APIs Without Algo Registration
•APIs can be used without registering the algo if trading speed is below 10 orders per second (OPS).
•Brokers must have risk checks and monitoring controls in place.
•Generic algo ID will be issued by exchanges for unregistered algos.
•Exchanges may restrict certain order types/contracts for such algos.
C. Registered Client-Generated Algos
•If trading exceeds 10 OPS, the algo must be registered with the exchange.
•A simplified framework will be adopted for such registrations.
•Changes in logic require re-registration.
D. Broker-Generated Algos
•Must be registered with exchanges.
•Exchange-issued algo ID is mandatory on every order.
•Any updates in logic must be notified and reapproved.
E. Algos via Empanelled Providers
•Must be empanelled and registered with exchanges.
•Unique algo IDs are provided and can be used across brokers.
•Brokers must inform exchanges of any commercial or technical arrangements and carry out due diligence.
F. Threshold Orders Per Second (OPS)
•Set at 10 OPS per segment/exchange.
•Brokers can set stricter limits per client, within this ceiling.
G. Algo ID Tagging
•All algo orders, whether above or below threshold, must be tagged with an exchange-provided unique ID.
H. Risk Management
•Must follow SEBI/NSE risk management guidelines including for Internet Based Trading (IBT) and Wireless Trading (STWT).
I. Operational & Security Standards
•Strong audit trails must be maintained (minimum 5 years).
•Two-factor authentication, password protections, and OAuth-based login required.
•APIs must be closed-loop (i.e., no open APIs allowed).
•All retail algos must be hosted on exchange-approved servers.
J. Other Notes
•Does not apply to Direct Market Access (DMA).
•Brokers may charge API and registration fees.
•Exchanges reserve the right to terminate rogue algos affecting market stability.
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