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India's steps to regulate algorithmic trade may hurt liquidity, traders say

MUMBAI (NewsRise) -- India's capital markets regulator recently proposed measures to tighten regulations on algorithmic trading to ensure equal and fair access to all market participants, but traders are concerned the steps may pose a threat to prevalent liquidity available on the exchanges.

A chunk of algorithmic trading today consists of high frequency trading (HFT), which leverages high-speed financial data and sophisticated technology for quicker access to stock prices and to place a large number of orders at speeds faster than ordinary investors. The practice, which includes placing servers as close to the exchanges as possible - called colocation, has been widely criticized the world over for giving such traders an unfair advantage.

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