New norms for order-to-trade ratio in algo trades

PTI New Delhi | Updated on June 24, 2020

SEBI on Wednesday put in place a new framework for order-to-trade ratio (OTR) of algo orders placed by stock brokers.

In a circular, SEBI said it has decided to modify existing OTR framework after receiving requests from the stock exchanges.

Under the framework, stock exchanges may be permitted to introduce additional slabs up to an OTR of 2,000 (from existing OTR of 500), and for OTR more than 2,000, such slabs can be introduced with deterrent incremental penalty, which stock exchanges may decide jointly.

On the third instance of OTR being 2,000 or more, in the last 30 days (rolling basis), the concerned member will not be permitted to place any orders for the first 15 minutes on the next trading day as a cooling off action.

Published on June 24, 2020

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