Thursday February 5 2026

News Source: Global Exchanges

Focus: Trading Systems and Technology

Type: General

Country: India

Link: https://tinyurl.com/48sv6k5c




On 04th February 2026, the Securities and Exchange Board of India (SEBI) issued a circular regarding revision of Order-to-Trade Ratio (OTR) framework.

Para 7.1.2.2, 7.1.2.3, 11.2.14 and 11.2.15 of Chapter 2 of the Master Circular for Stock Exchanges and Clearing Corporations dated December 30, 2024, prescribe the framework for placing effective economic disincentive by Stock Exchanges for high order-to-trade ratio (OTR) of Algorithmic orders placed by Trading Members (TMs).

Taking into account the representations received from the Stock Exchanges, deliberations held with the various stakeholders and recommendations of the Secondary Market Advisory Committee of SEBI, it is decided to carry out the following modifications in the aforesaid framework:

  • For equity option contracts, orders within ±40% of LTP (premium) or ±INR 20, whichever is higher, shall be exempted from the framework for imposing penalty for high OTR.
  • The Algorithmic orders placed by Designated Market Makers for market making activity shall not be considered towards computation of OTR.

Accordingly, para 11.2.14.1 and 11.2.14.2 of Chapter 2 of the Master Circular, are modified as under:

  • 2.14.1. Orders placed within the range of ±0.75% of the LTP shall be exempted from the framework for imposing penalty for high OTR. However, for equity option contracts, orders placed within the range of ±40% of LTP (premium) or ±INR 20, whichever is higher, shall be exempted from the framework for imposing penalty for high OTR.
  • 2.14.2. OTR framework shall be applicable to the orders placed in the cash segment and the derivative segment, including the orders placed under the liquidity enhancement schemes. However, the algorithmic orders placed by Designated Market Makers for market making activity shall be exempted from the framework for imposing penalty for high OTR”

The provisions of this circular shall come into effect from April 06th, 2026.

Click on the above link for further information