New NSE Rules for Retail Algo Trading

07 May. 2025

New NSE Rules for Retail Algo Trading: Compliance Guide

Algo trading in India is entering a new chapter—not just a rulebook update, but a structural transformation.

Gone were the days of loosely governed APIs and open pipelines. With SEBI trying to tighten the loop, retail algo trading can no longer be treated as a "grey area," but is now a fully regulated zone. This change must interest you, be you a trader, a platform, or a broker.

So, what has changed? And how can you comply and stay competitive?

Let us unlock the future—with inputs from Combiz Services Pvt Ltd, which leads the way in AI-driven algo trading bridges and compliance-ready infrastructure for Indian traders.

Retail Traders: An Overview

There are several changes the new regulatory framework brings in for you to comply with as a retail trader. These changes target safe access for API trading and the duration required to execute your orders. Here is what you need to do:

Static IP Requirement: Every retail trader using API access is now mandated to provide a static IP address to his or her broker. This addresses security issues while ensuring traceability of the connection between the trader and broker's infrastructure. One static IP per client is allowed, with a second on standby for redundancy.
Algo Access Based on Order Speed

Orders ≤10 per second: Registration to exchange is not required for algos that send orders at a rate of 10 or less per second.
Orders >10 per second: Registration with your broker shall become mandatory if your algo crosses the limit.

Multiple API Keys: Multiple API keys can be generated by developers for various purposes, but a broker will keep track of which keys are used by registered algos and which ones are by unregistered algos.
Limits on Changes to IP: Static IPs shall hold the criterion that a change in them will be limited to once per week, barring emergencies, giving way to stable and foreseeable trading sessions.
Sharing of IP in Familiars: SEBI allows sharing of static IPs among family members, subject to written consent and verification through two-factor authentication (2FA).
Daily Session Logouts: All API sessions will get logged out once the trading day comes to an end to maintain security and compliance.
No Registration, Limited OPS: If your algo has less than or equal to 10 orders per second (OPS), you are supposed to go ahead without formal registration, but it must conform to risk controls.

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Algo Platforms: What Is Expected From You

Algo platforms act as crucial infrastructure and tools for retail traders. These platforms must observe the following:

Empanelment With Exchanges: Algo platforms must be empaneled with exchanges such as NSE, thereby making them eligible for undertaking trading services.
Algo Registration: Each algorithm made available to retail traders must be guaranteed with the appropriate exchange. The platform will then allocate a unique ID to each algo for traceability.
Technical and Commercial Disclosures: Platforms must disclose any technical and commercial relationships with brokers to the exchange and must uphold transparency at all levels.
Secure Hosting: All retail algos must get hosted with servers situated in India abiding by SEBI standards for cybersecurity. The platforms must also retain all audit trails for five years.
Two-Factor Authentication (2FA): The API access must be 2FA-protected to ensure the retail traders' accounts remain secure.
No Open API Models: Open access APIs are forbidden. Instead, each client shall be provided a unique key/IP pairing, which will ensure that access is controlled at the individual level.

For Brokers

Brokers act as the final gatekeepers in this newly structured ecosystem. They, therefore, come with the responsibility of overseeing API-based trading end-to-end. What exactly do they have to do?

Approve API Access from Static IPs: Brokers must whitelist static IPs provided by traders and vendors and correlate such to the respective API keys for registration.
Monitor Orders (OPS): Brokers must ensure that they keep an active watch on API orders and block any orders that hit the Threshold Orders Per Second (TOPS) that currently stands at 10 OPS.
Algo Tagging and Audit Trails: Every order, whether from a registered algo or an unregistered one, must carry a unique Algo ID in order to provide for complete traceability. Consider that brokers need to keep these audit logs for at least 5 years.
Session Control: The brokers are responsible for seeing that all API sessions are logged out when trading comes to an end for the day. In addition, they need to make sure that API keys are segregated appropriately for registered and unregistered algos.
Due Diligence on Algo Providers: Services from third-party platforms will need to undergo a due diligence procedure by brokers to ascertain that they comply with the regulations.
Client Eligibility Enforcement: Brokers must secure the use of trading APIs or any third-party systems for only those clients that are eligible to use such APIs or systems.
Full Responsibility for Trades: Brokers shall be fully responsible for every trade carried out through client API or vendor API, be it on behalf of clients or not.

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What Happens If You Don’t Comply?

If you violate these new rules, in different ways you might be censured:

Rejection or Blocking of API Orders: Brokers might reject or block orders that violate the laid-down rules.
Disruption of the Market: Exchanges might exercise their power to stop algos from disrupting the market.
Regulatory Action and Penalties: Violations may cause regulatory action and financial penalties, including termination of API access.

Why Combiz Services Pvt Ltd Is the Smarter Choice

Sounds overwhelming to change this system, right? That's when Combiz Services Pvt Ltd steps in.

This company offers AI Algo Trading Bridges that are:

Compliant with the SEBI requirements for static IP, session hygiene, and unique IDs
Can deal with OPS restrictions and secure authentications
Hosted on Indian servers in full audit capability mode
Designed to support seamless integration with major brokers' API ecosystem
Combiz is helping you from becoming a non-compliant, non-competitive ride to becoming compliant, competitive, and confident-algo platform provider or just an individual trader.
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Conclusion: The Future of Algo Trading

This compliance shift signals the maturation of India’s retail algo trading landscape. While the new requirements may feel restrictive at first, they bring greater trust, transparency, and accountability to the market. Platforms like Combiz Services are already in the process of adapting their infrastructure to meet these standards, ensuring compliance with static IP enforcement, OPS limitations, and unique algo ID integrations.
For more information on how to stay compliant and leverage these changes effectively, visit Combiz Services AI Bot Algo Trading Bridges.