Algo CTCL Terminal for Sub-brokers
Note: This article is outdated; release of APIs by different brokers has changed the paradigm for algo trading.
The CTCL is an acronym for Computer-To-Computer-Link network.
The Indian Exchanges provide a set of APIs to allow connectivity to the market for transactions and order management. The CTCL Terminal refers to the trading front-end developed by broker using the exchange allowed CTCL API & data set.
The CTCL is developed by a broker and extended to its different branch offices and Sub-brokers. Any client who wants to trade in stock market through the broker will be mapped to a particular CTCL ID. Thus the CTCL Terminal is a front-end provided by brokers for multi-client trading.
Contents
Features of CTCL Facility
- CTCL Facility is provided by NSE and MCX
- Allows brokers to develop their own customized front-end software for connectivity and transacting with NSE
- Integration with Broker’s back-office, risk-management, order-management and online trade reports
- Broker generally deploy CTCL through a exchange empanelled vendor (example- Omnesys or Financial Technologies)
- Broker may also develop in-house CTCL or get it developed from non-empanelled vendor and take NSE’s approval for providing it to its clients. NSE audit requirements for Stock Broker can be found here.
CTCL Requirement for Algo Traders
As per NSE/MCX circulars, algo trading facility can be provided through CTCL ID. The exchange does not say anything about fully-automatic or semi-automatic. Thus for authorized algo trading, a trader needs a CTCL Id. Let us now look at the requirements for CTCL.
A CTCL terminal can be provided by broker to their authorized dealers only with proper checks. As per NSE requirements, the CTCL id can be allocated to only a dealer who has passed NCFM exam for the respective NSE segment. For MCX, any exam certification is not required for CTCL ID.
Symphony’s Presto is an example of CTCL; also note that Symphony is an empanelled vendor for NSE.
NSE-BSE Arbitrage
Similar to the NSE’s CTCL, the BSE provides a different connectivity interface- IML (Intermediate Messaging Layer).
Due to the two different interfaces, many software vendors compete to provide a front-end trading system which can place orders in both exchanges, while connecting appropriately to the two different interfaces. Such arbitrage applications are provided by FT, Omnesys, TCS and GreekSoft.
Diagram courtesy: Comtel India
Circulars for In-house CTCL
- NSE Circular dated July 8, 2011 (.pdf)
- NSE Circular dated dated August 25, 2006 (.htm)
- NSE Circular dated August 24, 2005 (.htm)
- Initial NSE Circular dated May 12, 2000