Exchanges enforce throttles or limits to prevent system overload and unfair advantage for ultra-fast traders
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FRANCIS MASCARENHAS
BSE’s new throttle charges have added to the troubles of algorithmic and high-frequency traders and stock brokers alike — tightening free usage limits, making order-heavy strategies costlier and increasing margin pressures, said industry experts.
Under the revised regime, trading members will be allowed only 40 messages per second (MPS) for free, as against the earlier 10,000 MPS. Members will be charged ₹50,000 for a block of 100 MPS, ₹1 lakh for 200 MPS, and ₹2 lakh for 400 MPS annually.
Similarly, members will be charged ₹5,00,000 annually for 1,000 MPS, which will be further hiked proportionally by ₹5,00,000 for every additional 1,000 MPS. Every time a broker or a computer programme sends an order, a modification, or even a cancellation to the exchange, it counts as a message. MPS is a measure of the number of such messages a trading member is allowed to send per second.
The revised system discontinues the earlier structure, which was introduced in October 2024, where members could avail of additional blocks of 1,000 MPS for ₹10,000 per 15-day cycle.
Throttle squeeze
“Mid to large brokers, algo players, and HFTs may incur substantial charges. Firms keen to scale order volumes will now have to budget MPS like infrastructure, making algorithmic trading more expensive,” said Ajay Kejriwal, executive director at Choice Equity Broking.
Further, exceeding MPS limits can cause order rejections, latency, or session drops — which impacts trading execution and client experience. Meanwhile, some small players may find a more level playing field as aggressive algo players face higher throttle costs, reducing unfair high-frequency traffic, Kejriwal said.
Atul Parakh, CEO of Bigul, also sees a larger impact on algo and HFTs due to the heavy volume of trades that they generate. They will have to adjust their systems and update technology to monitor their orders and limits.
The National Stock Exchange already has a tighter fee structure ranging from ₹2,50,000 for 100 MPS, doubling for 200 MPS and 400 MPS. Exchanges enforce throttles or limits to prevent system overload and unfair advantage by ultra-fast traders, who send thousands of orders every second.
Margin pressures
“NSE is still charging 5x as compared to BSE. So, the increased charges are still very competitive,” said Jashan Arora, Director at Master Trust Group. “It may impact smaller players for a very short term, but it will be absorbed in the longer run.”
These fresh charges are seen as an effect of SEBI’s true-to-label mandate for exchanges and brokers, aimed at leveling transaction fees and curbing volume-based rebates.
“This significant shift disproportionately impacts smaller discount brokers, who previously leveraged these rebates and low-cost models to attract clients,” said Ajay Garg, CEO, SMC Global Securities. “While larger, bank-backed brokers with diversified revenue streams and scale are better positioned to absorb these increased costs.”
While the slabs are defined annually, members can adjust MPS limits on a monthly basis if changes are made before the second last trading session of the month. Monitoring will be done by the exchange on an intraday and monthly-basis, and optimisations will be made according to utilisations, BSE said in its circular.
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Published on July 11, 2025