Retail algo trading is allowed through the broker, with rules set by order rate and by who sells the algo
The rules sit in SEBI's circular of 4 Feb 2025, which applies to all brokers from 1 Apr 2026. The broker is the principal. Every algo order goes through the broker's API, carries an identifier issued by the exchange, and passes the broker's controls, which include a whitelisted static IP, two factor login and a daily logout.
For your own algo, the line is ten orders a second per exchange. At or below it, the algo runs through the broker's API without a separate exchange registration. Above it, the algo must be registered with each exchange, through the broker. A registered algo may be used by yourself, your spouse, dependent children and dependent parents, and by nobody else.
Selling or sharing an algo is a different activity. The provider must be empanelled with the exchange. A black box, where the logic is not disclosed, also needs SEBI research analyst registration, and the provider must keep a research report for each algo. Brokers may not make return claims for algos or associate with platforms that do.
The chart maps the retail path. NSE's consolidated algo standards of 30 Apr 2026 apply alongside the circular, so check the current text before relying on a detail here.
This is education on the rules, not legal advice, and it does not pick an algo or a provider. Whether a rule applies to your account is a question for your broker or a securities lawyer. The school's algo lessons cover design, backtesting method and risk controls, not strategies to run.
Before you trade. Derivatives trading carries a high risk of loss. SEBI's study "Profitability of Individual Traders in the Equity Derivatives Segment (FY25 to FY26)" (August 2026) found that 87.7% of individual traders in equity F&O made net losses in FY26, with aggregate net losses of Rs 91,685 crore. Read the SEBI study