Greenvisage explains, How is SEBI making Algorithmic Trading Safer?
The rise of retail investors in the Indian stock market has been accompanied by a surge in the popularity of algorithmic trading (or simply, algo trading). To address the growing participation of retail investors in this area and the associated risks, the Securities and Exchange Board of India (SEBI) has rolled out a new regulatory framework. This initiative aims to make algo trading more accessible, transparent, and safer for individual investors while ensuring the integrity of the financial markets. Algorithmic trading refers to the use of computer algorithms or automated systems to execute trading orders based on specific pre-set conditions. For example, an algorithm might automatically buy shares when their price exceeds a particular threshold and sell them once the price falls below a certain level. This automation enables traders to react to market movements without needing to monitor the markets constantly. It also helps reduce the impact of human emotions on trading decisions, such as fear or greed. In India, algo trading accounts for approximately 70% of the total market volume, with institutional investors dominating this space. However, the rapid rise of retail participation in the stock market has led many individual investors to explore the potential of algorithmic trading. While algo trading offers various advantages, such as increased speed and objectivity, it also poses certain risks if not used responsibly.
As the popularity of algo trading grows, SEBI has observed an increase in unregulated platforms offering algorithmic trading strategies with promises of unrealistic returns. These platforms have created concerns about the safety of retail investors, prompting SEBI to introduce new measures aimed at safeguarding their interests. A key aspect of SEBI’s new framework is the requirement for brokers to seek approval from stock exchanges for each algorithm they deploy. Every approved algorithm will be assigned a unique identification number (ID) for better tracking and auditing, ensuring that any technical glitches or violations can be quickly identified and corrected.
SEBI has introduced two broad categories of algorithms: White Box Algos and Black Box Algos. White Box algorithms are fully transparent, allowing users to understand and even replicate the underlying logic of the system. On the other hand, Black Box algorithms, which are commonly used by institutional traders, are proprietary and less transparent. These will face stricter regulatory measures, including the requirement for algo providers to register as research analysts and maintain detailed records of their operations. One of the most significant changes under the new framework is the requirement for retail investors to register their algorithms with exchanges via their brokers. This registration process ensures that retail traders adhere to the same risk management rules as those used by brokers and institutions. The goal is to prevent disruptions to the market caused by poorly designed or malfunctioning algorithms. Another major part of SEBI’s framework is the introduction of stronger security features for brokers offering Application Programming Interface (API) services. APIs allow traders to connect their algorithms to the stock market for automated execution. To minimize the risk of unauthorized access, brokers are now required to implement two-factor authentication and other access controls to ensure that only authorized users can access and use the APIs. In addition, stock exchanges will have the authority to intervene in cases of malfunctioning algorithms. They will be able to halt any algorithm that poses a risk to market stability using a ‘kill switch.’ This feature is crucial to preventing significant disruptions or losses caused by erroneous trades.
References:
- SEBI – Circular on Participation of Retail Investors in Algorithmic Trading
- Investopedia – Basics of Algorithmic Trading: Concepts and Examples
- Economic Times – Sebi opens algorithmic trading to retail investors: Opportunities, risks, and the future of HFT in India
- Indian Express – SEBI proposes allowing retail participation in algo trading
- Image by pch.vector on Freepik
Greenvissage explains, Can Green Hydrogen Lead India’s Energy Transition?
As the world grapples with the urgency of tackling climate change, the search for cleaner, more sustainable energy sources intensifies. Amid the growing interest in renewable energy solutions, one technology stands out for its potential to revolutionize the way we power industries, transportation, and even our homes: green hydrogen. Imagine a fuel that, when burned, doesn’t produce harmful emissions or pollutants that contribute to air pollution—a leading cause of global health problems. Instead, this fuel releases nothing more than water vapour, a completely harmless byproduct. This is the promise of hydrogen, particularly green hydrogen, which could help decarbonize hard-to-abate sectors and accelerate the global transition to clean energy. Hydrogen, the simplest and most abundant element in the universe, holds the potential to become a clean and versatile energy carrier. However, hydrogen isn’t naturally available in usable quantities on Earth. Instead, it must be produced through various methods, each with its environmental impact. The most environmentally friendly method is green hydrogen, produced via electrolysis—a process in which electricity is used to split water (H₂O) into hydrogen (H₂) and oxygen (O₂). For hydrogen to be considered “green,” the electricity used in the electrolysis process must come from renewable sources such as wind or solar power. This distinguishes green hydrogen from other types, such as grey or blue hydrogen, which are produced using fossil fuels like natural gas or coal, contributing to harmful carbon emissions.
Green hydrogen is often viewed as a potential game-changer for several sectors of the global economy. While it’s true that electric vehicles (EVs) and renewable energy technologies like wind and solar are rapidly decarbonizing electricity generation, there are several industries and sectors where electricity alone isn’t enough or practical. These are often referred to as the “hard-to-electrify” sectors. Industries like steel, cement, and chemicals are major sources of carbon dioxide (CO₂) emissions, largely because they rely on high-temperature processes that are difficult to electrify. In transportation, especially for long-haul freight or heavy-duty vehicles, battery-electric solutions aren’t always feasible. Electric trucks require large, heavy batteries, which can become impractical when hauling large loads over long distances. In such cases, hydrogen-powered fuel cells offer a more efficient alternative. These fuel cells convert hydrogen into electricity to power vehicles, emitting only water vapour as exhaust. Hydrogen-powered trains, ships, and even aeroplanes are also being researched, with early-stage prototypes already in development. Hydrogen can also act as a form of energy storage. As intermittent renewable energy sources like wind and solar power generate electricity, green hydrogen can be produced during times of excess energy and stored for later use. This addresses one of the biggest challenges with renewable energy—its variability.
While the promise of green hydrogen is undeniable, several obstacles must be overcome before it can be deployed on a large scale. Currently, green hydrogen is significantly more expensive to produce than hydrogen derived from fossil fuels. The process of electrolysis requires a large amount of renewable electricity, making it energy-intensive and costly. As a result, many industries are still opting for cheaper, fossil-based hydrogen. For hydrogen to become a widespread solution, new infrastructure is required. Transporting, storing, and distributing hydrogen requires specialized equipment, such as pressurized tanks, pipelines, and refuelling stations. Developing this infrastructure is both challenging and costly. Additionally, hydrogen is highly flammable and requires careful handling and storage, further complicating the task of building a global hydrogen economy. The process of converting electricity to hydrogen and then back into electricity (for example, in a fuel cell) involves significant energy losses. Estimates suggest that up to 40% of the energy can be lost during these conversion stages. This makes hydrogen less efficient compared to direct use of electricity for applications such as battery electric vehicles or grid storage.
References:
- Wikipedia – Green Hydrogen
- Indian Express – Why green hydrogen presents both major opportunities and significant challenges
- India Briefing – How India Plans to Achieve Cost-Effective Green Hydrogen Production
Greenvissage explains, How do New Data Protection Rules secure your Privacy?
In a significant move to safeguard citizens’ digital rights, the Ministry of Electronics and Information Technology (MeitY) has recently introduced the draft Digital Personal Data Protection (DPDP) Rules, 2025. These rules are designed to operationalize the Digital Personal Data Protection Act (DPDP Act), 2023, which aims to create a robust framework for protecting personal data while also promoting the growth of India’s digital economy and fostering innovation. The draft rules are primarily focused on implementing the provisions of the DPDP Act, of 2023. The law seeks to protect individuals’ data and ensure it is handled responsibly by entities that process it. This is aimed at ensuring that India’s data sovereignty is maintained while also allowing businesses to engage globally.
One of the most significant features of the rules is the emphasis on citizens’ rights. Individuals (referred to as “Data Principals”) will have the ability to demand erasure of personal data, appoint digital nominees who can act on their behalf in managing their data, access user-friendly mechanisms for controlling and managing their data preferences with the entities processing their data (Data Fiduciaries). The draft rules define entities that collect and process personal data—such as social media platforms, e-commerce websites, and online gaming services—as Data Fiduciaries. These entities will be responsible for ensuring that they adhere to data protection principles and ensure that the rights of Data Principals are respected. The rules stipulate that data retention can only last up to three years after the last interaction with a user or from the effective date of the rules (whichever is later). Furthermore, Data Fiduciaries are required to notify users at least 48 hours in advance before erasing their data. The rules adopt a digital-first approach to enforcement, including the creation of the Data Protection Board of India (DPBI). The DPBI will be tasked with handling consent mechanisms, grievance redressal, and complaints related to data breaches. The aim is to ensure faster online resolution of complaints, making it easier for citizens to exercise their rights. The draft rules introduce a concept of graded responsibilities for different categories of Data Fiduciaries. Smaller entities like startups and MSMEs will face a lower compliance burden, while large platforms—such as Facebook, Instagram, Amazon, and Netflix—will bear more stringent obligations as Significant Data Fiduciaries due to the sheer volume of user data they handle. The rules also envisage the role of Consent Managers—third-party entities that help in the collection, storage, and management of user consent. These managers will play a crucial role in ensuring that users’ data privacy is respected across various digital platforms. The rules require Consent Managers to be Indian companies with a minimum net worth of ₹2 crore to ensure they have the financial and operational capacity to handle data responsibly. A central component of the draft rules is the creation of the Data Protection Board of India (DPBI). This body will be empowered to adjudicate complaints related to personal data breaches, with civil court powers to ensure effective enforcement.
The DPDP Act, 2023, which forms the foundation for the DPDP Rules, includes several noteworthy provisions designed to bolster data protection across India. Individuals will have the fundamental right to access, correct, and erase their data. This ensures greater control over how personal information is used and processed. The DPDP Act mandates that explicit consent must be obtained before processing any personal data, and consent forms must be clear, transparent, and accessible. To enhance security and enforceability, sensitive data must be stored and processed within India. This provision is expected to address concerns regarding cross-border data transfers and ensure local jurisdiction over sensitive information. The DPBI will serve as the regulatory authority, overseeing compliance with the DPDP Act and handling grievance redressal for data-related complaints. Organizations will be obligated to notify individuals and the DPBI of any personal data breaches. This ensures accountability and transparency, allowing affected individuals to take necessary precautions. The DPDP Act also imposes strict penalties on organizations that fail to comply with data protection requirements.
References:
- The Hindu – IT Ministry notifies draft rules on data protection law, seeks feedback by February 18
- Business Standard – Draft Digital Personal Data Protection Rules prioritises India’s commitment to citizen-centric governance
- Press Information Bureau – Draft Digital Personal Data Protection Rules
- Image by pikisuperstar on Freepik
Greenvissage explains, Can weight loss drugs reduce our healthcare costs?
Weight loss has always been a challenge for millions, and now, pharmaceutical giants like Novo Nordisk and Eli Lilly are offering a revolutionary approach. Their drugs—Ozempic, Wegovy, and Mounjaro—promise significant weight loss through simple subcutaneous injections. With such transformative potential, these drugs are being hailed as game-changers not only for personal health but also for reducing long-term healthcare costs. But is this claim grounded in reality? Initially developed to manage type 2 diabetes, these drugs work by mimicking a natural hormone called GLP-1 (glucagon-like peptide-1). This hormone regulates appetite and prompts insulin release when blood sugar levels are high, stabilizing glucose levels. Clinical trials have shown remarkable results, with some users losing 15–20% of their body weight after consistent use. This unexpected benefit has made these drugs popular for weight loss, with millions of Americans already on them. By 2035, experts predict up to 24 million users in the US alone.
The global market for these medications could skyrocket to USD 130 billion by 2030, a testament to their growing demand. The appeal of GLP-1 agonists doesn’t stop at shedding pounds. Preliminary studies suggest that these drugs could help manage a range of chronic conditions, including sleep apnea, chronic kidney disease, and cardiovascular issues. There’s even optimism about their potential to aid in addiction treatment and neurological conditions like Alzheimer’s and Parkinson’s. Such wide-ranging benefits have fueled optimism about their ability to reduce healthcare costs. Obesity, after all, is a significant contributor to chronic illnesses like diabetes, hypertension, and heart disease. The argument is simple: Address obesity, and you tackle many related conditions, potentially saving billions in medical expenses. However, the high price tag of these medications raises eyebrows.
A monthly supply can cost over USD 1,000, making it inaccessible to many. Even Elon Musk has voiced concerns, suggesting that making these drugs affordable could significantly cut obesity-related healthcare expenditures. Musk’s argument aligns with a pressing public health issue: 70% of American adults are either overweight or obese. But despite the enthusiasm, a closer examination reveals a more complicated picture. The promise of reduced healthcare costs seems too good to be true, and recent studies suggest it might be. While users of these drugs do lose weight, their overall medical expenses have shown an upward trend. For instance, one study found that obese patients spent an average of $12,695 annually on medical care before starting these medications. Two years later, their expenses surged to USD 18,507—a 46% increase. By comparison, those not on these drugs saw only a 14% rise in medical costs. Moreover, the study revealed no significant reduction in obesity-related health issues such as heart attacks, strokes, or type 2 diabetes. Users still required medications for high blood pressure and cholesterol, underscoring the fact that weight loss alone doesn’t necessarily equate to improved health outcomes.
One of the biggest challenges with GLP-1 drugs is sustainability. Once users stop taking them, the appetite-suppressing effects vanish, leading to weight regain. This phenomenon stems from the fact that these drugs don’t address the root causes of obesity; they merely mask the symptoms. Experts point out that successful weight loss involves creating a calorie deficit, prompting the body to burn stored fat for energy. However, when weight is lost rapidly, as is often the case with these medications, muscle mass is also depleted—accounting for 20–40% of the total weight loss. Losing muscle can slow metabolism, leaving individuals more prone to fatigue and weight regain. This means that even though users may appear healthier on the surface, they could face long-term challenges in maintaining their weight and overall health.
References:
- MSNBC – Joe Biden’s well-intentioned Ozempic plan officially pathologizes fatness
- BBC – What happens when you stop taking weight-loss drugs?
- Financial Express – Data shows weight-loss drugs didn’t curb health costs within two years
- Image by storyset on Freepik
Greenvissage explains, Why are MSMEs in India still struggling for loans?
When discussing the titans of the Indian industry, names like Tata, Birla, and Ambani dominate the conversation. These corporate giants, with their influence spanning boardrooms and global markets, capture headlines and public imagination. However, the true narrative of India’s economic growth is incomplete without acknowledging the vital role of Micro, Small, and Medium Enterprises (MSMEs). The significance of MSMEs in India’s economy is staggering. These enterprises contribute roughly 30% of India’s GDP, highlighting their importance as engines of economic activity. Moreover, MSMEs account for 40% of India’s exports, showcasing their ability to compete on a global scale. Perhaps their most transformative contribution is employment: the sector employs over 22 crore people, meaning almost one-third of India’s workforce depends on MSMEs for their livelihoods. With 6.3 crore enterprises scattered across the nation, MSMEs are a testament to India’s entrepreneurial spirit. Yet, despite their impressive contributions, MSMEs face formidable challenges that hinder their growth and, in some cases, threaten their survival.
For any business, credit is essential to grow, innovate, and sustain. Whether it’s buying new equipment, paying wages, or expanding to new markets, access to funding can make or break a business. MSMEs, however, often find themselves stuck in a vicious cycle. They need credit to grow but struggle to secure it due to systemic obstacles, both from lenders and their operational limitations. When seeking credit, MSMEs typically have two options: Non-Institutional Sources include local moneylenders, friends, or family. While these sources are easily accessible, they come with exorbitant interest rates, sometimes so high that businesses end up spending the bulk of their profits repaying the loan. Institutional Sources: Banks, Non-Banking Financial Companies (NBFCs), and venture capitalists fall under this category. These channels offer regulated and fairer terms, with lower interest rates. Ideally, these should be the preferred choice for MSMEs. However, accessing funds through formal institutions is often an uphill battle.
Shockingly, only 5% of MSMEs successfully secure funding through institutional sources, while another 2% rely on non-institutional lenders. The remaining 93% either self-finance their operations or remain underfunded, unable to access the credit they desperately need. According to an RBI report, the credit gap for MSMEs is estimated at a whopping INR 20-25 lakh crore. This massive shortfall underscores the systemic issues in India’s financial ecosystem when it comes to supporting small businesses. The challenges MSMEs face in securing credit can be broadly categorized into supply-side and demand-side issues.
Lenders perceive MSMEs as high-risk borrowers. Many small businesses lack formal financial records or sufficient collateral, making it difficult for banks to evaluate their creditworthiness. Stringent regulations and lengthy application processes deter many MSMEs from pursuing loans through formal channels. The informal nature of many MSMEs, some of which are not even registered, further complicates their access to institutional credit. Many MSME owners are unaware of the formal credit avenues available to them. A lack of proper financial records, such as balance sheets or credit scores, makes it almost impossible for them to secure loans. Past experiences of loan rejections discourage MSMEs from even applying for institutional credit.
The government has doubled its budget for the Ministry of MSMEs, signalling its commitment to supporting this vital sector. Loans of up to INR 10 lakh are now available without the need for collateral, removing a significant barrier for small businesses. Platforms like the Trade Receivables Discounting System (TReDS) allow MSMEs to unlock funds tied up in pending invoices, improving cash flow. Under PSL guidelines, banks are required to allocate a portion of their funds specifically for micro-enterprises. The Unified Lending Interface (ULI) initiative simplifies the loan application process by automating credit assessments, making it faster and more transparent. By integrating data such as GST filings, the framework helps lenders evaluate the financial health of MSMEs, even in the absence of traditional documentation. These initiatives enable struggling MSMEs to restructure their loans and regain financial stability.
References: