SEBI Eases OTR Norms for Equity Options, Exempts Market Makers' Algo Orders

• SEBI has revised its Order-to-Trade Ratio (OTR) framework, relaxing compliance for equity options traders.
• Algorithmic orders placed by designated market makers for market-making activity will now be exempt from OTR computation.
• For equity option contracts, orders within ±40% of the last traded price (premium) or ±Rs 20 (whichever is higher) are exempted from high OTR penalties.
• The changes aim to curb market manipulation, reduce system congestion, and ensure fair trading, following consultations with market participants and SMAC recommendations.
• The new norms will be effective from April 6, 2026, applying to cash and derivative segments, excluding algorithmic market-making orders.