DMA facility will be open to institutional investors and the exchanges will have the discretion to allow other category of investors access to this in due course, a Sebi release said. The Sebi release said one of the advantages of DMA is that “clients can make better use of hedging and arbitrage opportunities through the use of decision support tools/algorithms for trading.” This makes it clear that algorithmic trading will be allowed. Earlier this year, Sebi had cleared the registration of the world’s largest hedge fund, Renaissance Technologies, which is an algorithmic trader. The Securities and Exchange Board of India (Sebi) has not specified any time frame to kick off the new system but said brokers would need to have software and systems in place that support direct access and take approval from the stock exchanges. All orders placed through DMA will be routed through the brokers’ trading system. The brokers will need to maintain a separate database of the orders executed and maintain an audit trail for five years.   more »