(LiveMint)
The Securities and Exchange Board of India (Sebi) announced norms to make algorithmic trading more accessible for investors. It asked stock exchanges to introduce shared co-location services to cut costs. Algorithmic trading refers to orders generated using automated execution logic. Co-location allows members to place their servers in the exchange premises for faster access to trading.
Sebi proposed a penalty framework for high order to rate ratio. A high order to trade ratio means that there are many orders that are not converted into trades. The regulator also told bourses to provide tick-by-tick data feed (TBT Feed) to all trading members free of charge. This will allow every trading member to know the best prices of any given stock on a real-time basis so that everyone is able to take equal advantage of price movements in stocks. Sebi’s move will allow small and mid-size brokers get a share of the co-location racks at exchanges for a monthly rent of Rs 40,000-50,000.
