After receiving necessary approvals and guidelines from Securities & Exchange Board of India (Sebi), the Bombay Stock Exchange has introduced Smart Order Routing (SOR) for its members.
As per the Sebi circular SOR allows brokers' trading engines to systematically choose the execution destination based on the factors like price, cost, speed, likelihood of execution and settlement, size, nature or any other consideration relevant to the execution of the order.
SOR is well-established in all developed markets with multiple exchanges. It is widely used by leading brokerage firms globally for more than a decade, the BSE said in a statement here.
The introduction of SOR in India by Sebi is an important step in the evolution of our market infrastructure, and should result in a significant improvement in the liquidity, integrity and overall quality of our markets. BSE is excited with this development and will be working closely with firms and their clients to facilitate its roll-out, the release said.
Some key attributes for SOR include, best price, lowest cost, probability of execution, it said.
