Walk into the National Stock Exchange today, and you will not find traders shouting orders across a floor. What you will find are rows of servers. Algorithms, not people, now drive a growing share of every trade executed on Indian exchanges, and a significant slice of that activity happens at microsecond speeds that no human can match or even properly observe. This paper argues that India's legal framework has not kept pace with this transformation. The statutes that govern securities markets were drafted for a world of human traders, and stretching them to cover autonomous systems requires interpretive leaps that create uncertainty for regulators, courts, and market participants alike. Drawing on the NSE co-location scandal as a case study in what regulatory gaps can cost, and comparing India's approach to those of the United States, the European Union and the United Kingdom, this paper identifies four core deficiencies in the current framework: the absence of statutory definitions, the lack of mandatory registration for high-frequency trading firms, an unresolved liability framework for algorithmic harm, and inadequate real-time surveillance capacity. Six targeted reforms are proposed to address these gaps, adapted to India's specific market context rather than copied wholesale from other jurisdictions.
Radhika Maheshwari (Fri,) studied this question.