Revision of Order-to-Trade Ratio (OTR) framework
Summary
SEBI has revised the Order-to-Trade Ratio (OTR) framework to exempt specific equity option orders and Designated Market Maker algorithmic orders from high OTR penalties. The modifications update paragraphs 11.2.14.1 and 11.2.14.2 of the Master Circular for Stock Exchanges and Clearing Corporations. These changes are mandated to come into effect on April 06, 2026.
Text
For equity option contracts, orders within ±40% of LTP (premium) or ±INR 20, whichever is higher, shall be exempted from the framework for imposing penalty for high OTR.
The Algorithmic orders placed by Designated Market Makers for market making activity shall not be considered towards computation of OTR.
Orders placed within the range of ±0.75% of the LTP shall be exempted from the framework for imposing penalty for high OTR. However, for equity option contracts, orders placed within the range of ±40% of LTP (premium) or ±INR 20, whichever is higher, shall be exempted from the framework for imposing penalty for high OTR.
OTR framework shall be applicable to the orders placed in the cash segment and the derivative segment, including the orders placed under the liquidity enhancement schemes. However, the algorithmic orders placed by Designated Market Makers for market making activity shall be exempted from the framework for imposing penalty for high OTR.
The provisions of this circular shall come into effect from April 06, 2026.
Make necessary amendments to the relevant bye-laws, rules and regulations for the implementation of the above decision, as may be necessary/applicable.
Bring the provisions of this circular to the notice of the market participants (including TMs) and to disseminate the same on their website.
This circular is being issued in exercise of powers conferred under Section 11 (1) of the Securities and Exchange Board of India Act, 1992, read with Regulation 51 of the Securities Contracts (Regulation) (Stock Exchanges and Clearing Corporations) Regulations, 2018 to protect the interests of investors in securities and to promote the development of, and to regulate the securities market.
Source: SecMarx — Revision of Order-to-Trade Ratio (OTR) framework. Verbatim text is public record; SecMarx structuring (linkage to applying orders) is cited to us.