Api (over) regulation – SEBI – #9 by Pk308 – General – Trading Q&A by Zerodha

It appears SEBI is considering marking all API requests as algos and subjecting them to the current approval/audit process along with only allowing execution on broker servers.

This seems like a huge step back to me, as it prevents something as basic as accessing the API.

And it probably hurts me badly, at least in the near future, since I’m currently only intraday trading with a system I’ve designed and worked on for many years – from secretly trading on Nest (using ahk automation to sending orders manually…) to trading with apis Full automation using my own tools. Automation has allowed me to be more or less emotion-free and also to reduce the risk of mistakes and to make many trades. I doubt I’ll be able to do it manually now, because I make a lot of orders and don’t really want to mess with the broker GUI sending 2k-3k orders in a year. And jugaad trading with alternative solutions will run the risk of something not working out on any good day – not a professional way to trade most of your net worth.
Nest is gone from most brokers, and who wants to use it?

If this happens, it will likely infect many people like me. We can adapt, I can start looking at EOD trading for example. But all the work you have done so far will be wasted and time will be wasted developing something that can be done manually and in scaling it up. Even for discretionary trading, we will have to execute manually without being able to have a broker with internal checks. And I probably won’t be able to access the returns I’m getting today. STT is really high, overnight cash more than a few times.

The third party providers that provide algae for retail obviously need some regulatory oversight, but this kind of implementation penalizes people like me who know what they are doing, in order to further protect the ones who don’t make the effort. And my trades do not bring any real market risk – individual retails generally do not have this volume.

I sound very negative, but past experience has been that SEBI is indifferent to the individual retailer and brokers do not take a firm stand in their opposition.

Will Zerodha really be ready to host retail algae? It seems impractical. And the approval/audit process seems to be very difficult to implement, especially as systems improve/change over time.

6.1 All requests from the API should be treated as and should be an algorithm command
Under the control of the stock broker and the APIs to implement Algo trading
To be tagged with the unique algo identifier provided by stock exchange grants
Algorithm approval


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