IFSCA issues Guidelines for Algorithmic Trading on the Stock Exchanges

PRESS RELEASE IFSCA issues Guidelines for Algorithmic Trading on the Stock Exchanges The International Financial Services Centres Authority (IFSCA) today issued a Circular on “Guidelines for Algorithmic Trading on the Stock Exchanges” to promote the sound, orderly and transparent development of algorithmic trading across the Stock Exchanges in IFSC. The guidelines are intended to strengthen market integrity, mitigate systemic and operational risks, and ensure fair and equitable access to market infrastructure.

Key features of the Circular include: • Prior approval: No Market Participant shall deploy, offer or facilitate Algorithmic Trading without the prior express approval of the Stock Exchange and initial conformance testing.

• Governance: Market Participants shall maintain adequate governance, oversight and risk management arrangements, including where artificial intelligence or machine learning is used. • Risk controls: Price, quantity, order value and automated execution checks, a kill switch mechanism and system capacity checks, including for orders routed through DMA/SA.

• Audit trail: All Algorithmic Trading Orders shall be tagged with unique identifiers, up to the level of the individual client and the specific Trading Algorithm. • System audit: Annual system audit by eligible system auditors, with rotation of auditors and time-bound corrective action.

Implementation The Stock Exchanges have been directed to put in place the requisite systems within three months of the date of issuance of the circular. The existing Algorithmic Trading Systems shall undergo conformance testing within the same period.

The Circular is available on the IFSCA website at www.ifsca.gov.in.

October 16, 2026 GIFT City, Gandhinagar