Sebi wants more retail investors to use algo trading. Algo trading uses computer programs to trade fast. It accounts for 70% of market volume. Many worry about the complexity. The approval process for trading strategies may be slow.

Sebi called for asking tech-savvy retail investors to register the algos they have developed with the exchanges through their brokers.

Sebi’s proposal to allow retail investors in algo trading aims to democratize market access, offering tools previously reserved for institutions. With safeguards in place, the move could reshape retail participation in India’s capital markets.

Sebi introduced algo trading through the direct market access facility, which provided advantages such as faster order execution, reduced transaction costs, greater transparency, better audit trails and improved liquidity.

Zerodha CEO Nithin Kamath has now offered his thoughts on Sebi's suggested guidelines for individual investors in algorithm trading. On December 13, the Securities and Exchange Board of India (Sebi) released a consultation paper addressing algorithmic trading for retail investors.