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TMI BlogMeasures to strengthen Algorithmic Trading and Co-location /Proximity Hosting frameworkX X X X Extracts X X X X X X X X Extracts X X X X ..... O/MRD/DP/CIR/P/2016/129 dated December 01, 2016 laid down guidelines to ensure fair and equitable access to the Co-location/proximity hosting facility offered by stock exchanges. 2. In order to address the concerns relating to algorithmic trading and colocation / proximity hosting facility offered by stock exchanges and to provide a level playing field between Algorithmic/ Co-located trading and manual trading, SEBI issued a discussion paper on August 5, 2016 requesting market participants to provide their views on the efficacy and need to introduce further mechanisms to address the aforementioned concerns. 3. In light of the public comments received and in consultation with Technical Advisory Committee (TAC) of SEBI and Secondary Mar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ccountable for actions of vendors providing Managed Co-location Services and ensuring integrity, security and privacy of data, being handled at the facility. 7. Further, in order to have fair competition, stock exchanges are advised to ensure that multiple vendors are permitted for providing Managed Co-location Services at their co-location facility. Measurement of Latency for Co-location and Proximity Hosting 8. Clause 3.9 of SEBI circular CIR/MRD/DP/07/2015 dated May 13, 2015, mandated stock exchanges to publish suitable quarterly reports on their websites on latencies observed at the exchange. 9. Currently, latency is measured by the Stock Exchange as the time taken to complete the round trip from the Core Router (Core Rout ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... igh daily order-to-trade ratio (OTR) of algo orders placed by trading members. In order to encourage algo traders to place more orders closer to the last traded price (LTP), the following modification shall be carried out in the existing OTR framework: a. Instead of orders placed within 1%, orders placed within 0.75% of the LTP shall be exempted from the framework for imposing penalty for high OTR. b. Orders placed in the cash segment and orders placed under the liquidity enhancement schemes shall also be brought under the OTR framework. Unique Identifier for Algorithms / Tagging of Algorithms 15. Clause 6 (vi) of SEBI circular CIR/MRD/DP09/2012 dated March 30, 2012, prescribed that all algorithmic orders be tagged with a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s, rules and regulations; b. bring the provisions of this circular to the notice of the stock brokers / clearing members and also disseminate the same on their website; c. communicate to SEBI the status of implementation of the provisions of this circular through monthly development report. 20. This circular is being issued in exercise of powers conferred under Section 11 (1) of the Securities and Exchange Board of India Act, 1992, read with Section 10 of the Securities Contracts (Regulation) Act, 1956, to protect the interests of investors in securities and to promote the development of, and to regulate the securities market. 21. This circular is available on SEBI website at www.sebi.gov.in at Legal Framework Circulars . Yo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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