In a bid to relax algorithm trading norms at commodity derivatives exchanges, markets regulator Sebi raised the limit to process up to 100 orders per second by a user for such trade from the existing limit of 20 orders per second.
The decision has been taken after receiving representations from exchanges along with views of Sebi’s subcommittee — Commodity Derivatives Advisory Committee.
The markets regulator asked exchanges to ensure that the limit it provides is subject to its ability to handle the load.
Besides, the regulator has decided to do away with the requirement of empanelment of system auditors by the exchanges for system audit of algorithmic trading.
Algorithmic trading or algo in market parlance refers to orders generated at a super-fast speed by use of advanced mathematical models that involve automated execution of the trade, and it is mostly used by large institutional investors.