Description

Trading members required to submit information about existing clients using algorithmic trading platforms as on September 30, 2025, by October 31, 2025, as part of the framework for safer participation of retail investors in algorithmic trading.

Summary

BSE has issued Notice No. 20251014-3 requiring trading members to submit details of existing clients using algorithmic trading platforms as on September 30, 2025. This requirement is part of SEBI’s framework for ‘Safer Participation of Retail Investors in Algorithmic Trading’ as outlined in SEBI circular SEBI/HO/MIRSD/MIRSD-PoD/P/CIR/2025/132 dated September 30, 2025. Trading members must provide client information in a specified format by October 31, 2025.

Key Points

  • Trading members must report number of 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: Client PAN, White box strategy (Y/N), Black box strategy (Y/N), Product type (IBT/STWT/API)
  • This requirement stems from clause 7 of SEBI circular SEBI/HO/MIRSD/MIRSD-PoD/P/CIR/2025/132 dated September 30, 2025

Regulatory Changes

This circular implements milestone requirements from SEBI’s framework for ‘Safer Participation of Retail Investors in Algorithmic Trading’. The regulatory framework requires exchanges to collect and maintain data on retail clients engaged in algorithmic trading activities, distinguishing between white box strategies (transparent) and black box strategies (opaque), as well as different product types including Interactive Brokers Trading (IBT), Strategy Trading With Tools (STWT), and API-based trading.

Compliance Requirements

Trading members must:

  1. Compile data on all existing clients using algorithmic trading platforms as on September 30, 2025
  2. Prepare an xlsx file containing the following information for each client:
    • Serial Number
    • Client PAN
    • White box strategy usage (Y/N)
    • Black box strategy usage (Y/N)
    • Product type (IBT/STWT/API)
  3. Name the file using the convention: Membercode_RetailAlgo_ClientDetails.xlsx
  4. Submit the file to BSE by October 31, 2025
  5. Contact BSE Trading Development or Trading Operations for clarifications at trading.app@bseindia.com or Tel. No. 022-2272 5873/5661/5116/5172

Important Dates

  • September 30, 2025: Reference date for client data (snapshot date)
  • October 14, 2025: Notice date
  • October 31, 2025: Deadline for submission of client details

Impact Assessment

This requirement impacts all trading members who offer algorithmic trading platforms to retail clients. The data collection exercise is designed to enhance regulatory oversight and ensure safer participation of retail investors in algorithmic trading. Trading members will need to:

  • Review their client base and identify all clients using algorithmic trading facilities
  • Categorize clients by strategy type (white box vs. black box) and product type
  • Establish processes to compile and submit this information in the required format
  • Potentially implement systems to track and report such information on an ongoing basis

The impact is operational, requiring trading members to allocate resources for data compilation and submission. This is part of broader regulatory efforts to bring transparency and safety measures to algorithmic trading for retail participants. Non-compliance with the submission deadline may result in regulatory action by the exchange.

Impact Justification

Medium importance as it is a data submission requirement for trading members with existing algorithmic trading clients, supporting SEBI's framework for safer retail participation. Impact is medium as it affects trading members operating algorithmic trading platforms but is primarily a reporting obligation with a clear deadline.