Thursday January 22 2026

News Source: Global Exchanges

Focus: General - Global Exchanges

Type: General

Country: India

Link: https://tinyurl.com/55wjrkta




On 21st January 2026, the International Financial Services Centres Authority (IFSCA) issued consultation paper on the proposed guidelines for algorithmic trading on the stock exchanges in IFSC.

Algorithmic trading has emerged as a dominant force on the stock exchanges worldwide, driven using powerful computer programs and machine learning. These systems, also known as algo-trading or black-box trading, execute orders based on a predefined set of instructions, often at speeds and frequencies impossible for human traders.

Algorithmic trading may involve the use of basic algorithms to feed portions of an order into the market based on basic parameters such as price, volume and time. At its most complex, it may entail many algorithms that are able to assimilate information from multiple markets in different assets and to use this to implement a high-speed, multi-asset trading strategy that transacts numerous inter-related trades in fractions of a second.

Need for Regulating Algorithmic Trading:

Due to the speed and potential for market disruption, regulators worldwide have established various frameworks to regulate algorithmic trading.

Algorithmic trading poses potential risks to market stability and integrity. Some of these risks are outlined below:

  • Increased market volatility
  • Market manipulation
  • Operational risk
  • Opacity and complexity

Therefore, algorithmic trading requires proper regulation and supervision to ensure market integrity and prevent market manipulation through infrastructure, speed or access advantages.

The aim of this consultation paper is to seek a balance between the benefits of algorithmic trading with the need to safeguard the capital market against systemic risks and ensure market integrity. The guidelines envisaged by IFSCA seek to promote transparency, accountability, and mitigate risks posed using algorithms in trading on the stock exchanges.

Click on the above link for further information