The Securities and Exchange Board of India (SEBI) on Friday decided to allow ‘smart order routing’ in stock trading that automatically routes the order to the best price available for a stock across several exchanges at a given time.
“Upon examination of the proposal, feedback of the stock exchanges and based on the recommendations of the technical advisory committee, it has been decided to permit smart order routing in Indian securities market,” said a Sebi circular.
The facility will be available to investors of all class.
“The brokers will apply with us and we have to decide within a month and the the facility should be available to the investors by Navratri,” said a senior official at one of the leading exchanges.
According to a market expert, at a given point of time there are various prices quoted for a stock at different exchanges. While one may quote a few paisa more, the other may quote a few paisa less and in such a case the smart order router goes to the order placed at the exchange that offers the best price and liquidity.
The facility will be offered by the brokers through their trading engine.
Once the brokers apply with the bourses, the exchanges will have to communicate their decision within 30 days.
While Sebi has asked the stockbrokers to furnish a list of details to the stock exchanges, it has advised the stock exchanges to put in place adequate systems and issue necessary guidelines for implementing the same.