BSE Brokers Forum has arrived at a conclusion that three out of seven suggestions made by the capital market regulator Securities and Exchange Board of India (SEBI) on the algo issue has merit.
“The three suggestions in which the forum board arrived at a consensus as suggested by the SEBI included putting limit on order trade ratio, separate queues for algo and non-algo orders and uniform data dissemination,” BSE Brokers Forum Chairman Sidharth Shah said in a statement after holding a board meeting on the issue.
“However, the board did not see adequate merit in the remaining four suggestions including frequent batch options, random speed bumps, randomisation of orders and minimum resting time,” Shah added.
The rationale to decide on the issues was based on trading venue operators (stock exchanges) provide fair, transparent and non discriminatory access to their markets and to associated products and services, as set out by International Organization of Securities Commissions (IOSCO) in its final regulatory issues raised by the impact of the technological changes on market integrity and efficiency.
The board also took note of the fact that while other jurisdictions of the world may not have such curbs, SEBI in its wisdom has taken a bold initiative to address such concerns keeping in mind the Indian eco-system as it threatens to have immense impact on the future of the capital markets of this country.
“Technological advancement in the form of Algo/HFT/colo is no doubt adding value by way of liquidity and depth in the market, but this activity is hitherto to unregulated should come under the ambit of judicious regulations to ensure level playing field,” BSE Brokers Forum vice-chairman Alok Churiwala said.