SEBI Extends Timeline for Retail Algo Trading Framework, Full Implementation from Apr 1, 2026

The Securities and Exchange Board of India (SEBI) issued circular dated September 30, 2025, announcing an extension of timelines for the rollout of its earlier circular dated February 4, 2025, which introduced a new framework titled “Safer Participation of Retail Investors in Algorithmic Trading.”

This decision has been taken to provide stock brokers and algorithm vendors more time to make necessary system changes and ensure smooth implementation of the new rules.

Originally, the framework was supposed to take effect from August 1, 2025, and was later extended to October 1, 2025. After receiving several representations from stock brokers and algo vendors, and considering the clarifications and modifications made by stock exchanges in September 2025, SEBI has now decided to adopt a phased implementation approach through a glide path.

Under this glide path, SEBI has outlined three key milestones that all stock brokers must meet:

• By October 31, 2025, each broker must apply for registration of at least one retail algo strategy with the exchange, along with retail algo products offered through APIs.
• By November 30, 2025, brokers must complete the registration of retail algo products and a few algo strategies with the exchange.
• By January 3, 2026, brokers must participate in at least one mock trading session using the new system and provide evidence of participation to the exchange.

SEBI has clearly stated that brokers failing to meet these milestones will not be allowed to onboard new retail clients for API-based algorithmic trading from January 5, 2026.

Brokers who are not ready to go live from October 1, 2025, must submit details of their existing clients as of September 30, 2025, to the stock exchange in the format prescribed by the exchange.

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SEBI has further clarified that the complete retail algo trading framework including all implementation standards and operational modalities issued by stock exchanges will become fully mandatory from April 1, 2026, for all stock brokers.

The circular also directs stock exchanges to:

• Inform all their members about the provisions of the circular and publish it on their websites,
• Put in place proper systems to monitor compliance, and
• Make amendments to their bye-laws, rules, and regulations wherever required.

SEBI issued this circular under the powers granted by Section 11(1) of the SEBI Act, 1992, and Section 30 of the SEBI (Stock Brokers) Regulations, 1992, to protect investors, promote market development, and regulate securities markets.

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