Mumbai, May 16 -- The National Stock Exchange (NSE) has issued a framework for application programming interface (API)-based trading that brings retail algorithmic (algo) strategies under a clearly regulated domain.

Until now, retail algo trading has operated in a loosely supervised space. This follows the Securities and Exchange Board of India's (Sebi) February directive on retail algo trading. NSE's 5 May circular tightens access, sets thresholds, and mandates algo tagging and registration.

Mint explains what algorithmic trading is, what the NSE circular mandates, and how the rules will impact retail traders and brokers.

Algorithmic trading, or algo trading, refers to the automated buying and selling of securities using pre-programme...