SEBI Revises Order-to-Trade Ratio Rules, Exempts Market Makers' Algo Orders

The Securities and Exchange Board of India (SEBI) has revised its Order-to-Trade Ratio (OTR) framework, easing compliance for equity options traders by exempting algorithmic orders placed within 40% of the last traded price or Rs 20, whichever is higher, from penalties. Additionally, algorithmic orders by designated market makers for market-making activities will be excluded from OTR calculations. These changes, effective April 6, 2026, aim to support liquidity while curbing excessive order placements. SEBI chairperson Tuhin Kanta Pandey also stated no immediate new regulations are planned for equity derivatives, emphasizing a data-driven approach.