To add on, being open could be an issue only for those using APIs for random people. One person using APIs for their own personal use may not be impacted.
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yes this is my use case. But if someone willing shares keys with others how can it be distinguished from this use case ? You could have 1 ip sending orders for many, but thatās probably not fool proof.
totp as a 2nd factor auth fails here because we can get totp via code too.
But something like a physical rsa device might be acceptable ? That would atleast require the user to share key every time its needed or if he gives up his rsa device itself, then still someone will still need to copy from device.
I donāt know if there is any fool proof way, maybe Zerodha tech can find some way.
The market regulator is only trying to stop algo sellers who promise unrealistic returns to retail traders with its move to regulate API-based algorithmic trading, according to a source who is working closely with the regulator.
The regulator is highly unlikely to interfere with retail traders who arenāt selling algos to others, the insider added.
Doesnāt look good if they are discussing about imposing restrictions on retail traders who run their own algos.
@nithin
Has Zerodha proposed ālicensing hassleā for retail traders using API for personal use?
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@nithin @MohammedFaisal Thank you so much for answering my queries earlier but can you provide us more context on this news article we see? Should individual retail traders go through the muck of exams to use an api ā¦ like for real?
Very disappointing. As an individual trader, why do I need a license to place order via API? No country does this.
I am using my own money. I am using my own code. I am making market efficient.
I am not carrying a GUN! I am just using a simple API!! What is this man? Whatās the logic?
To punish few scammer algo providing platforms, you are punishing thousands of innocent people? What type of justice is this?
Government of India is making rules like this on algo trading, AI models, canāt trade outside India etc. Stop giving me reasons to leave INDIA please!
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According to āsomeoneā apparently the data discussed in the committee shows that not many retailers are using custom algos ā¦ my logic is that an api is a bridge to build a lot of things not just to take trades but also to give ideas on when to take a trade by an analysis software ā¦ no 3rd party algo will reach the level of customization required for an individual ā¦ classic throw the baby out with the bathwater attitude , sigh ā¦
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Lot of the articles on moneycontrol have no substance. I am sure everybody knows that they do a lot of paid articles . Anyways we should wait to see if any legit source says this. Also would like to know about points zerodha made at this meeting. Also if their aim is to regulate algo sellers then mostly new rules will impact them. They surely canāt have exams for this for retail level.That would be funny . It would create so many issues. For e.g. if someone has a HUF account then who is eligible to give the exam. @nithin can you please update. Thanks
That is something all of us can agree on. You need to have a lot of control reading their clickbait articles.
Its revenue loss for all the intermediaries. Most likely will not get passed.
I canāt comment on the article, but our stance hasnāt changed. Anyone using it for themselves should get it, and anyone commercially selling it should go in for approval.
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@nithin you had once gone into a fair bit of detail on how to get into fully automatic algo trading by registering as an authorised person and getting a dealer terminal.
Does the new proposal by SEBI, to regulate players like tradetron and retailers alike, in any way affect the framework above?
This was in 2015 before Kite connect was around. 
Hopefully not.
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Seems like this is happening.
Rules seem to be designed for algo sellers but people like me who donāt sell algo, trade on my own account ( profitable for almost 5 years now) are maybe not going to get āopen api accessā
Part of the potential regulation is algo disclosure to exchange which is something very few will agree to, esp if algo has any real value and i am not selling to someone else. Considering how even phone numbers leak easily and nobody seems to have a clue, its a stretch to expect us to trust some 3rd party to keep info safe.
Lots more things that could potentially be disastrous depending on how they actually define this ( max order size based on income? etc )
Previously there was talk of having ip level restrictions, which if done sanely would have been much better and without this regulatory overreach.
Just pinging with hope that someone from Zerodha might mention people like us to SEBI and have a path for us - One person trading on his own account from say 1-5 ip address per day ( backup internet / dynamic ip) needing api access for automation.
Many people might start looking at unreliable ways of automation otherwise, and we go back a decade and also potentially get discriminated against vs algo sellers.
Finally, there are parts of api which are not related to ordering - realtime data / historical data / quote api etc. I hope that access to these does not get banned in any case as its unrelated.
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Its crazy what kind of people are coming up with these ideas.
How does restricting the number of times an order can be modified safeguard that retail trader?
I am all for regulating the third party algo providers but why kill profitable self algo trading businesses? What kind of socialist policies are we heading towards? Will merit never be encouraged in our country?
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Regulations are not out yet, so i am hoping there is space for independent traders too.
But so far, it doesnāt look encouraging.
This is somewhat similar to the terrible consultation paper they released few years back, so maybe they donāt care about us and not much changed after consultation. We are a minority anyway.
I keep getting the feeling that here someone commits the sin and someone else pays for it ā¦
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So there are some details coming out about potential api regulation. Link above + also some things circulating on telegram.
We donāt have details but it seems to be good on surface. There is mention of people with own developed algos and some pics are suggesting that even algo providers will be given space for black box algos along with transparent ones.
This looks great, but devil is in the details. I really hope that its fair to us.
Dunno if we can give feedback to SEBI like last time. So just writing down what i can think of and perhaps you can give that as feedback if possible.
Self-developed algo
The facility of algo trading shall be provided by the stock broker only after obtaining requisite permission of the stock exchange for each algo, said SEBI.
In the market, many tech savvy investors develop their own algos to place their trades. The regulator has suggested these traders get their algos registered with the exchanges with their help of their brokers. This algo can then be used by the family of these traders. Family for this purpose would mean self, spouse, dependent children and dependent parents, said the paper.
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So we will need to register with exchange via broker. There is nothing mentioned about what details need to be registered, i hope its something simple with fast approval looking for things like background checks / identity / algo high level details. Basically it should just be to get unique tag so that they can monitor orders if needed and the tag will be restricted to work with only my account/family account. This should be black box, there is no need for exchange to know exact algo and micro manage that.
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I hope Zerodha will be quick to implement this and SEBI will give enough time for brokers/traders to implement this. Hoping that i am not forced to move to another broker due to delay ( which has become a pattern for other features - that i dont mind but this is critical for us)
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No static ip restriction for self developed algos. Since orders will be identifiable via tags and tags are restricted to my account, there should be no demand for static ips. Jio/Airtel mobile ips are dynamic, my airtel fiber also has dynamic ip and i like to have mutiple options in case one network goes down.
Lets hope for the best ā¦
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Yes. I hope it is just high level details like # of orders expected to be fired, instruments they run on and algo IDs for brokers to monitor frequency and qty per algo. If it requires us to reveal info like āpython codeā and associated config files - that would be so badā¦
Some of that can be dynamic too - no of orders / instruments / qty. I take more trades when things are moving and less when slow for example. List of stocks keeps changing as volume/public interest changes. Qty keeps changing too for me, i take less qty in volatile stocks for example. And with compounding, capital / qty will keep increasing with time.
Ideally, Just stocks intraday / fno etc ( and maybe a wide range for other things) should be enough and reasonable background check to make sure people dont use it as a loophole. No need to micromanage. Different traders will have different styles and needs.
I donāt think they will expect code, but even expecting disclosure of logic will be bad.
All of this will also makes it easier for broker and exchange to implement this for our case if things are kept simple.
Extra checks are relevant only for algo providers really as they can have cluster of orders in same place and are exposing other peopleās account to risk.
I havent read the official notice, no idea where that is. But this is much better than last consultation paper and people like us have been recognized, so hopefully this will work out ok.
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@nithin any idea if the new circular will cause any disruption to Kite APIs and the way we are using it today? I use it for my personal use and I donāt want to reveal the logic or code to anyone. So will that be allowed or I am forced to disclose the details if I want to use the API
Most of the notice is made for algo providers, but there is one para for traders who trade on their own.
Unclear which requirements will overlap between algo providers and independent traders.
Things like static ip doesnāt make sense for us since they can already track through the tag which will be unique to account. No need to restrict network options.
Similarly we shouldnāt need to 'Register as a Research Analyst and maintain a research
report ā as algo logic is understood by us by definition ( but not disclosed to any one else).
Dunno how they will interpret this, since i know the logic of algo and i am also the user, so maybe it will be considered whitebox?
So we should all send our inputs to SEBIās āDRAFT CIRCULARā. I wrote some of the points above, you can use that and maybe add more points here if you think of something.
This is the SEBI link ā
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