SEBI extends settlement scheme for brokers linked to algo platforms till Oct 16

Capital market regulator SEBI has extended the settlement scheme for stock brokers associated with certain unregulated algo trading platforms until October 16, 2025. The scheme, introduced in June, was originally scheduled to close on Septembe 16.

The move follows increased interest from entities seeking to make use of the window. “Considering the interest of entities in availing the scheme, the competent authority has extended the period of the scheme till October 16, 2025,” SEBI said in a public notice.

The scheme provides brokers facing proceedings — before an Adjudicating Officer, the Securities Appellate Tribunal or courts — an opportunity to reach a settlement with the regulator.

By opting in, brokers may bring pending cases to an expedited conclusion. SEBI has cautioned that action against those who choose not to participate will continue in accordance with law.

The initiative was first announced on June 9, 2025 under Section 15JB of the SEBI Act, 1992 read with Regulation 26 of the SEBI (Settlement Proceedings) Regulations, 2018.

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It was aimed at addressing long-pending matters related to brokers’ associations with unauthorised algo platforms.

Last year, SEBI had issued show-cause notices to over 110 brokers. The regulator observed that unregulated platforms were offering algorithmic trading strategies, often marketed with claims of assured returns, raising serious concerns about investor protection.

By offering a structured path to resolution, SEBI hopes the scheme will provide clarity to market intermediaries while ensuring that violations are addressed. However, the regulator has made it clear that non-participating entities will not be shielded from enforcement actions.