
Algorithmic trading is the use of computer programs with predefined rules to automatically analyse market data and execute buy or sell orders in financial markets without human intervention. This enables seamless trading and reduces human error.
The landscape of retail algorithmic trading is evolving, and in response to the NSE’s implementation standards (Refer: NSE circular | NSE Circular FAQs) aimed at fostering safer participation of retail investors in algorithmic trading, we are rolling out mandatory enhancements to our SmartAPI access.
Effective from 01-Apr-2026, API order execution will only be accepted if it originates from your registered primary static IP.
1. Move to Static IPs: All API orders must come from a registered, whitelisted static IP to ensure traceability and prevent unauthorized access.
| Client generated algos | Algos generated via empanelled algo provider(s) | Broker-generated algo |
| The static IP shall be that of the client. | The static IP shall be that of the vendor or the client. | The static IP shall be that of the broker or the client. |
2. Order Per Second (OPS) Thresholds: A standard Threshold Order Per Second (TOPS) has been set at 10 OPS per exchange/segment.
| Below 10 OPS | Above 10 OPS |
| Algos do not require individual registration but will use a generic algo ID provided by the exchange. | These algorithms must be registered with the respective exchange to obtain a unique registration ID. |
3. Hosting and Infrastructure: To maintain strict risk management and data confidentiality, the NSE now mandates that all retail algorithms including those from empanelled providers—be hosted on the Trading Member's (broker's) server. The only exception is for "Tech-savvy" clients who maintain their own logic and host using a registered Static IP at their end.
4. Prohibited Order Types: To curb volatility and protect retail interests, Market orders and IOC orders are now strictly prohibited for algorithmic trading.
1. When do these new regulations come into effect?
The mandatory requirement for Static IP registration and related security guidelines will become effective on April 1, 2026.
2. Is a Static IP address mandatory for all individual retail clients?
No. A registered Static IP address is only mandatory for Tech-savvy investors who use APIs to place orders for self-coded algorithms or strategies whose logic resides at the client’s end.
3. What happens if I use a DIY "No-Code" platform?
If you use a DIY nocode platform that is hosted on our secure broker servers, you are not required to provide a Static IP.
4. How do I register my Static IP?
You can register your IP through your SmartAPI dashboard. Log in, select "Add App," and enter your Primary Static IP address.
5. Can I have a backup IP address?
Yes. You may provide a Secondary Static IP for the purpose of connectivity redundancy. Please note that order requests will only be processed if they originate from your registered IPs.
6. How often can I update my registered Static IP?
You are permitted to update your mapped Static IP address as needed, but not more than once a calendar week.
7. Can I share my Static IP with others?
A Static IP can only be mapped to one client at a time. However, it can be shared between clients if they belong to the same family (as defined by SEBI), provided a formal written request and 2FA validation are submitted to the broker.
8. Where must my retail algorithmic strategies be hosted?
All retail algorithmic strategies must be hosted on the broker’s servers for risk control and data confidentiality, except for tech-savvy clients who host their own logic using a registered static IP.
9. Are there limits on how many orders my algorithm can send?
Yes. The Threshold Order Per Second (TOPS) is set at 10 orders per second (OPS) per exchange/segment.
10. What happens if my algorithm exceeds the 10 OPS limit?
If orders are received that exceed the threshold limit without proper registration, the broker is required to reject or not process such orders.
11. Are Market or IOC orders allowed in algorithmic trading?
No. Under the new framework, Market orders and Immediate Or Cancel (IOC) orders are strictly prohibited for algorithmic trading.
12. Do I need to participate in monthly mock trading sessions?
As a Tech-savvy client hosting your own logic, you are not required to participate in mandatory monthly mock trading sessions. All other entities and system-driven strategies must participate.
13. What are the requirements for Algo Providers offering "Black Box" algos?
Any algo provider offering "Black Box" algorithms must Register as a Research Analyst (RA) and maintain detailed research reports for each algorithm, which must be confirmed to the Exchanges.
14. Can an Algo Provider host strategies from multiple third-party RAs?
No. Since all algorithms developed by providers must be hosted on the broker’s server, it is not possible for an Algo Provider to host black box algos for multiple third-party RAs.
15. Does an Algo Provider need an auditor for cyber-incident declarations?
No. For empanelment, Algo Providers must provide a self-declaration of any cyber or adverse technical incidents over the previous three years on their own letterhead; an external auditor's report is not required.
Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.
Investments in the securities market are subject to market risks. Read all the related documents carefully before investing.
Published on: Feb 25, 2026, 3:35 PM IST

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