SEBI Rolls Out Settlement Scheme for Brokers Linked to Algo Trading Violations

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The Securities and Exchange Board of India (SEBI) has announced a limitedtime settlement scheme for stock brokers facing regulatory proceedings due to their association with unregulated algorithmic (algo) trading platforms. The scheme, aimed at resolving compliance issues efficiently, will run from June 16 to September 16.

Key Highlights:

Targeted Brokers: The scheme applies to brokers who received showcause notices for collaborating with unauthorized algo trading platforms.
Settlement Terms: Brokers can opt for a onetime payment ranging between ₹1 lakh to ₹2 lakh, depending on the severity of violations.
Regulatory Crackdown: SEBI had previously warned brokers against associating with algo platforms that falsely promised assured returns, violating fair trading norms.
Swift Resolution: The initiative aims to prevent prolonged legal disputes and ensure compliance without disrupting market operations.
Application Process: Eligible brokers must apply within the stipulated timeframe to avail of the settlement opportunity.

SEBI’s move underscores its commitment to maintaining market integrity while offering brokers a structured resolution path. Industry experts anticipate further regulatory measures to tighten oversight on algo trading practices.

Sources: InvestPolicy, MoneyControl, NiftyTrader.