New Delhi, Feb. 4 -- The Securities and Exchange Board of India (Sebi) has unveiled a revised regulatory framework aimed at promoting safer participation of retail investors in algorithmic trading.

The new guidelines, outlined in Sebi's circular issued on Tuesday, will require stockbrokers, exchanges, and algorithmic trading providers to implement stricter risk management measures. Brokers will be responsible for providing algorithmic trading through application programming interface or API (software connecting applications), and any algo provider or fintech or vendor will act as the agent when using the broker's API.

This comes after an increasing demand for algo trading by individual investors, a method long used by institutional trad...