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TMI BlogBroad guidelines on Algorithmic TradingX X X X Extracts X X X X X X X X Extracts X X X X ..... with regard to the requirement of system audit of trading algorithm / software used by stock brokers / trading members. After due examination of the suggestions in consultation with the Technical Advisory Committee, it has been decided to revise the requirement as follows: 2.1. The stock brokers / trading members that provide the facility of algorithmic trading shall subject their algorithmic tr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... during the process of system audit of trading algorithm / software shall be reported by the stock broker / trading member to the stock exchange immediately on completion of the system audit. Further, the stock broker / trading member shall take immediate corrective actions to rectify such deficiencies / issues. 2.4. In case of serious deficiencies / issues or failure of the stock broker / trading ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ock exchanges shall periodically review their surveillance arrangements in order to better detect and investigate market manipulation and market disruptions. 4. As directed vide circular dated March 30, 2012 stock exchanges have implemented a framework of economic disincentives for high daily order-to-trade ratio of orders placed from trading algorithms by prescribing penalties in form of 'ch ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ore than ten occasions in the previous thirty trading days. 6. The circular shall be applicable with effect from May 27, 2013. 7. Stock Exchanges are directed to: 7.1. take necessary steps and put in place necessary systems for implementation of the above. 7.2. make necessary amendments to the relevant bye-laws, rules and regulations for the implementation of the above decision. 7.3. bring th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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