SEBI has proposed allowing retail investors to use Direct Market Access (DMA), a system that lets orders go straight into the stock exchange’s trading platform through a broker’s infrastructure, without manual dealer intervention.
At present, DMA is mainly available to institutional investors, but the regulator believes technological advances now make it possible to extend the facility to retail participants as well. The proposal is part of a wider effort to simplify and modernise regulations related to exchanges, clearing corporations and depositories. SEBI has invited public feedback before finalising any changes.
If approved, retail investors would be able to place orders more directly through broker systems connected to the exchange, potentially improving speed and efficiency. However, brokers will still be responsible for maintaining risk controls and monitoring mechanisms to ensure safe trading.
SEBI has also suggested related changes in the commodity derivatives segment, including removing references that limit DMA access to foreign portfolio investors, which would allow broader participation across investor categories.
In addition, the regulator has proposed easing certain requirements for investment managers and streamlining technology rules across market infrastructure institutions. It also plans to strengthen cybersecurity standards, including the use of stronger encryption, two-factor authentication, better firewall protections and improved system segmentation.
The proposals are currently open for consultation, and SEBI will decide on the final framework after reviewing stakeholder feedback. If implemented, the changes could expand access for retail investors while updating and simplifying India’s market technology rules.
