What the algo framework actually requires.

Why this changed

Before the framework, retail algo trading in India ran largely on informal rails: unregistered signal sellers, loose API integrations, and strategies nobody could trace after the fact. The framework closed that. It made brokers legally responsible for every algorithm on their platform, required every algorithmic order to be traceable to a registered strategy, and set real obligations around authentication, audit and record-keeping.

The practical effect for someone choosing a platform is that a whole class of tools became non-viable, and the differences that matter between the survivors are no longer only about features and price.

What the rules require

An Algo-ID on every algorithmic order

Each algorithmic order must carry an exchange-issued identifier traceable to the strategy that produced it. Orders you place by hand are tagged as manual. An order that cannot be traced to a registered strategy should be rejected before it reaches the exchange, not tagged after the fact.

Brokers are the principals

Your broker is legally responsible for every algorithm running on its platform. Providers like Arthora act as agents: empanelled with the exchanges, partnered with registered brokers, and never connecting to an exchange directly.

A material change is a new strategy

Changing strategy logic is legally a new strategy requiring a new registration. Tweaking a parameter inside a pre-registered range is not. A platform that lets you edit live strategy logic and keep trading under the old registration is not doing this correctly.

Static IPs and 2FA on broker APIs

Broker API access must originate from whitelisted static IP addresses with two-factor authentication. Non-compliant brokers have been barred from onboarding new API clients since January 2026.

Five-year immutable audit logs

Orders, API calls, deployments and suspensions must be retained for five years in a form that cannot be edited after the fact. Corrections are new entries, never overwrites.

Research-analyst boundary on black-box strategies

Distributing a strategy whose logic is not disclosed to the user requires SEBI Research Analyst registration and a maintained research report for each algorithm. This is also why a platform holding RA registration cannot charge performance-linked fees.

Order-rate thresholds

Strategies exceeding the exchange order-per-second threshold trigger additional registration requirements. Most retail strategies are nowhere near it; the threshold matters if you are running many strategies or high-frequency logic.

What was also raised

Alongside the algo rules, the cost of short-term speculation was deliberately increased: securities transaction tax on futures rose from 0.02% to 0.05% and on options to 0.15%, cash-margin requirements were tightened, and position limits were hardened. This is the arithmetic behind a point worth internalising — with costs at these levels, whether a backtest is shown gross or net of charges is not a presentation detail. It is frequently the difference between a strategy that makes money and one that does not.

Questions worth asking any platform

None of these are trick questions, and a platform doing this properly can answer all of them immediately.

• Does every order you place for me carry an Algo-ID, and can you show me which strategy produced any given order?
• What happens when I edit a live strategy? Does deployment block until the change is re-registered?
• Are backtest and live performance figures shown net of STT, brokerage and slippage — and can I see the drawdown, not just the return?
• How long are my order and audit records kept, and can they be edited after the fact?
• Who holds my funds? (The answer should be: your broker, always.)
• If the strategy logic is not disclosed to me, under what registration is it being distributed?

Read next

• What Arthora is, and who it is not for →
• The Autopsy Rubric — how trading process is graded →