• Regulator to consult experts, counterparts to frame HFT rules
  • Broker associations called for prompt action on concerns

India’s market regulator is in discussions with international experts and regulators to help it frame guidelines for high-frequency trading, according to its top official.

The Securities & Exchange Board of India is considering checks on super fast strategies in an effort to strengthen rules for algorithmic trading, Chairman U. K. Sinha said in Mumbai on Thursday. His comments came after the country’s top brokerage associations joined a growing chorus of voices calling for the regulator to take action. A report by one of its own advisory panels called for a full investigation into claims of collusion between the National Stock Exchange of India Ltd. and a high-frequency trading firm.

“There is a race globally to bring down the latency and regulators are struggling to contain the risks,” Sinha said in an interview at an industry conference. “We have to be very careful in taking measures as if there is one disruption it could affect hundreds of people.”

Sinha declined to give a timeframe for any new rules, saying talks are ongoing.

A SEBI advisory committee last month recommended a probe into whether NSE officials worked with OPG Securities Pvt. to give the New Delhi-based trading firm preferential access, according to a copy of an internal report seen by Bloomberg News. It also called for the probe to examine whether Way2Wealth Brokers Pvt. benefited from a dedicated fiber-optic line between NSE and BSE Ltd., India’s second-biggest bourse.

The regulator will take action on the panel’s findings, Sinha said, without providing details on timing.

The Association of National Exchanges Members of India and the Brokers Forum, two of the country’s largest brokerage associations, have called for a formal investigation into the panel’s findings.

NSE declined to comment, while OPG has previously denied any wrongdoing. Officials at Way2Wealth didn’t respond to a request for comment.

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