Hi everyone,
Nowadays, technically anyone can build a third-party trading platform and make it available in the public domain. Public can log in using their own broker account API credentials, and the platform can display funds, holdings, positions, and even allow order placement through the broker.
My question to the forum:
At what stage does such a platform require official approval — whether from SEBI, the exchange, or any other regulatory authority?
Is approval required even if the platform is only acting as an interface (basically viewing portfolio data and forwarding orders via the broker’s API)?
Or does regulatory approval become mandatory only when:
- Orders are automated (algorithmic trading)?
- The platform provides trading advice or recommendations?
- It pools funds or directly handles client money?
In simple terms, if someone builds a third-party trading interface that allows the public to connect to their own broker accounts via API, does it still fall under SEBI or exchange regulations?
Requesting members who have a clear understanding of the regulatory framework to kindly clarify. This will help all of us avoid speculation and potential compliance issues going forward. It would also be appreciated if someone from Zerodha, familiar with the regulatory framework, could bring some clarity into this.
Thanks.