India's market regulator SEBI has proposed a broad overhaul of its trading and technology regulations, a package that would open direct market access (DMA — order-routing arrangements in which a client's orders reach the exchange without broker intervention) to all investors, not only institutions.

The proposal, reported by Zee Business, marks the first comprehensive revision of the framework governing how orders are routed, how members manage technology risk, and who may hold hands-on access to exchange infrastructure. SEBI has not yet published an effective date or compliance deadline; the measures remain at the consultation stage, mandated by nothing until the regulator issues a final circular.

What does the proposal actually change?

Two strands run through the package.

• Trading access. DMA, historically confined to institutional clients operating under broker supervision, would become available to all investor categories. That shifts the boundary of who can place orders directly into exchange matching engines.

Technology regulation. SEBI signals a rewrite of the rules covering members' trading infrastructure — the systems, controls and safeguards that brokers and their clients must maintain around electronic access.

The regulator frames the overhaul as modernization. The current rulebook predates the technology now standard on Indian desks.

How would DMA expansion affect execution workflow?

For sell-side firms, broader DMA means more clients with direct routing rights and, with that, more responsibility for controls — pre-trade risk checks, order throttles, and the supervisory layer brokers must keep between client systems and the exchange. For buy-side and retail-adjacent desks, it removes an intermediation step that today sits inside the broker's stack.

The cost and risk calculus is straightforward: direct access cuts latency and handoffs, but concentrates the burden of fat-finger and runaway-algorithm prevention on the access-granting member. Technology vendors serving Indian brokers should expect demand for client-facing risk gateways if the proposal becomes rule.

What is mandated and what is asserted?

Nothing in the package is yet mandated. SEBI has put forward draft provisions; market participants will weigh in before a final text, an effective date and compliance timelines appear. What can be asserted now is direction: the regulator wants a wider DMA perimeter and a technology rulebook rewritten for current market structure.

The open questions — eligibility conditions, risk-control obligations, capital or net-worth thresholds for access seekers — sit in the detail SEBI has yet to finalize.

Brokers, vendors and institutional desks will be watching for the consultation's outcome, the final circular, and the compliance window it sets, since each will determine how quickly DMA infrastructure must scale to a much larger user base.