Description

Trading members must submit details of existing clients using algorithmic trading platforms as on September 30, 2025, by October 31, 2025, as per SEBI framework for safer retail participation in algo trading.

Summary

BSE has issued guidelines requiring trading members to submit comprehensive details of existing clients using algorithmic trading platforms as on September 30, 2025. This requirement stems from SEBI circular SEBI/HO/MIRSD/MIRSD-PoD/P/CIR/2025/132 dated September 30, 2025, which outlined milestones for implementing a framework for safer participation of retail investors in algorithmic trading. Trading members must provide this information in a prescribed format by October 31, 2025.

Key Points

  • Trading members must submit details of all existing clients using algorithmic trading platforms as on September 30, 2025
  • Submission deadline is October 31, 2025
  • Information must be provided in xlsx format with specific naming convention: Membercode_RetailAlgo_ClientDetails.xlsx
  • Required data fields include Client PAN, white box strategy indicator, black box strategy indicator, and product type
  • Product types to be specified: IBT (Internet Based Trading), STWT (Smart Trade Web Terminal), or API
  • This is part of SEBI’s framework for Extension of implementation for Safer Participation of Retail Investors in Algorithmic Trading

Regulatory Changes

This circular implements clause 7 of SEBI circular SEBI/HO/MIRSD/MIRSD-PoD/P/CIR/2025/132 dated September 30, 2025. The regulatory framework aims to enhance oversight and safety measures for retail investors participating in algorithmic trading through proper documentation and tracking of client usage patterns.

Compliance Requirements

Applicable to: Trading members offering algorithmic trading platforms

Required Actions:

  1. Compile details of all existing clients using algorithmic trading platforms as on September 30, 2025
  2. Prepare data in prescribed format with following columns:
    • Sr. No.
    • Client PAN
    • White box strategy (Y/N)
    • Black box strategy (Y/N)
    • Product type (IBT/STWT/API)
  3. Submit file in xlsx format
  4. Follow naming convention: Membercode_RetailAlgo_ClientDetails.xlsx
  5. Submit to BSE by October 31, 2025

Contact for clarifications:

Important Dates

  • Reference Date: September 30, 2025 (snapshot date for client data)
  • Submission Deadline: October 31, 2025
  • Circular Date: October 14, 2025
  • Base SEBI Circular Date: September 30, 2025

Impact Assessment

Operational Impact: Trading members will need to conduct a comprehensive audit of their algorithmic trading client base and compile detailed information including strategy types (white box vs black box) and product platforms used. This requires coordination between compliance, technology, and operations teams.

Market Impact: Low direct market impact, but strengthens regulatory oversight of retail algorithmic trading activities. This data collection exercise will help exchanges and SEBI monitor the extent and nature of retail participation in algorithmic trading.

Compliance Impact: Medium - Trading members must ensure accurate and timely submission of client data. Non-compliance could result in regulatory action. Members need to establish processes to distinguish between white box and black box strategies used by clients and track product types accurately.

Impact Justification

Mandatory compliance requirement for trading members offering algorithmic trading services to retail clients, with specific deadline of October 31, 2025. Part of SEBI's framework for safer retail participation in algo trading.