It looks like SEBI is considering marking all api orders as algos and subjecting them to existing approval/auditing process along with allowing execution only on broker servers.
This looks a major backward step to me, denying something as basic as api access.
And it will probably hit me hard, at least in immediate future, as currently i only trade intraday with a system that i have designed and worked on over many years - from trading it with discretion over Nest (using ahk automation to send orders manually… ) to trading with apis with full automation with my own tools. Automation has allowed me to be more or less free of emotions and also to reduce risk of mistakes and to take many more trades. I doubt that i will be able to execute it manually now, as i place a lot of orders and really do not want to fiddle with broker GUI for sending 2k-3k orders in a year. And trading with jugaad type of workarounds will have risk of something not working on any fine day - not a professional way to trade most of your networth.
Nest is gone from most brokers, and who wants to use it ?
If this happens, it will probably hit many people like me. We can adapt, i can start looking at trading EOD for instance. But all of the work that i have done so far will go to waste and time will be lost in developing something that can be manually executed and in scaling up. And even for discretionary trading, we will be forced to execute manually without being able to have a middleware with internal checks. And i will likely not be able to reach the returns that i get today. STT is already very high, overnight in cash is multiple times more.
3rd party providers providing algos to retail should obviously need some regulatory oversight, but this kind of implementation punishes people like me who know what they are doing, in order to over protect people who dont take the effort. And my trading does not bring any real market risk - individual retail generally does not have that scale.
i sound very negative, but past experience has been that SEBI is indifferent to individual retail trader and that brokers never really take a firm stance in opposing them.
Would Zerodha be really willing to host retail algos ? It sounds impractical. And the approval/audit process looks to be very difficult to implement, esp as systems get refined/changed over time.
6.1. All orders emanating from an API should be treated as an algo order and be
subject to control by stock broker and the APIs to carry out Algo trading should
be tagged with the unique algo ID provided by the Stock Exchange granting
approval for the algo