By Mobis Philipose

Securities and Exchange Board of India (Sebi) is evidently shaken up by the algorithmic trading accident that occurred on BSE Ltd during last year’s Muhurat trading session. Since then, it has said on a number of occasions that it is reviewing the risk management framework for algorithmic trading. Last week, Sebi chairman U.K. Sinha took a step further when he said at the Asia Financial Forum in Hong Kong that it may consider speed limits on high-frequency trading (HFT). Asia Risk magazine, which reported his comments, adds that the policy on co-location may also be reviewed. Co-location facilities enable members to set up automated trading systems in the same building as the exchange, to reduce latency or the time required for data flow between the exchange and the broker’s trading system.

 Read more