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Sunday, Aug 25, 2019

SEBI board meet: Key decisions on algo trading, Kotak Panel recommendations

Here are they key takeaways from the SEBI board meeting held on Wednesday:

business Updated: Mar 28, 2018 18:40 IST

Press Trust of India, Mumbai
The logo of the Securities and Exchange Board of India (SEBI) is pictured on the premises of its headquarters in Mumbai.
The logo of the Securities and Exchange Board of India (SEBI) is pictured on the premises of its headquarters in Mumbai.(Reuters File Photo)

Markets regulator SEBI on Wednesday approved a number of measures to strengthen its algo trading framework, including by mandating the exchanges to offer shared co-location facilities and providing some services for free.

The regulator’s board has decided to review the trading requirement for algo software for strengthening algorithmic trading framework by mandating stock exchanges to provide a simulated market environment for testing of software used for such high-frequency trades, SEBI Chairman Ajay Tyagi told reporters.

These measures are expected to address the concerns relating to market quality, market integrity and fairness on account of usage of algo trading and co-location.

Co-location is a facility provided by exchanges to trading members and data vendors whereby their trading or data systems are allowed to be located within or at close proximity to the premises of the bourses.

This facility enables the co-located entities to access the trade/order related data before other non-co-located entities. It also enables co-located members to minimise the time for sending orders to the trading system of the exchange.

Kotak Panel Recommendations

The regulator also partially accepted the recommendations of the Uday Kotak committee on corporate governance as well as reduced the additional expenses charged on mutual fund schemes.

Among the recommendations made by the Uday Kotak panel, SEBI has accepted around 40 of them without any modification. The accepted proposals include capping the maximum number of directorship in listed companies to seven by April 1, 2020.

Addressing the media after the board meeting, SEBI Chairman Ajay Tyagi said the board has decided to partially accept the committee’s recommendations. Out of the 80 odd recommendations, the watchdog has rejected 18.

Besides, the regulator plans to amend takeover regulations, permit additional time for entities to increase open offer price.

First Published: Mar 28, 2018 18:16 IST

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