Attention, algo traders! The NSE has introduced a new safety mechanism, effective May 5, 2025, that will automatically reject market orders placed through algorithmic trading systems, starting with the Currency Derivatives (CD) segment. This will later be extended to other segments too.
What’s changing?
- Until now, algos placing market orders were penalised post-trade.
- With this new system, market orders from algos will be rejected upfront.
- This move is aimed at enforcing Market Price Protection (MPP) norms and preventing potential volatility due to unsupervised algorithmic market orders.
How will the system know it’s an Algo?
The Exchange will identify such orders using the 13th digit of the 15-digit NNF field (used in NNF terminals).
Why does this matter?
- Ensures tighter compliance with risk checks
- Minimises erratic pricing from aggressive algo orders
- Gives time to brokers and developers to adapt order flows accordingly
For technical documentation and error codes, check out:
NSE Trading Protocols Page ›
To read the full NSE circular, check out: https://nsearchives.nseindia.com/content/circulars/CD67733.pdf