Straight Through Processing Service in the Indian Securities Market
Summary
This circular issues the SEBI (STP Centralised Hub and STP Service Providers) Guidelines, 2004 to regulate Straight Through Processing services in the Indian securities market. The guidelines establish eligibility criteria for hubs and providers while defining their respective obligations regarding infrastructure, security, and data handling. These regulations are issued under Section 11(1) of the SEBI Act, 1992, to protect investor interests and promote market development. This section outlines specific operational and technical obligations for STP service providers, including digital signature management, message integrity, and connectivity standards. It establishes the conditions for SEBI approval, defining the tenure and grounds for suspension or cancellation of such approvals. Additionally, it mandates adherence to a Code of Conduct and requires the execution of a Model Agreement between the STP Centralised Hub and service providers. This section defines key terms including the Telecom Authority and TRAI, and outlines fee structures for STP Service Providers. It details specific obligations for both the Service Provider and the Centralized Hub regarding digital signatures, sof
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SEBI in order to regulate the STP service is hereby issuing the SEBI (STP centralised hub and STP service providers) Guidelines, 2004... which also prescribes the model agreement between the STP centralised hub and the STP service providers.
They shall come into force on 26th day of May, 2004
“STP centralised hub” means an infrastructure set-up by a person or entity for the purpose of rendering STP service by providing a platform for communication between different STP service providers;
"STP service provider” means a person or entity providing STP service to STP users to the extent of conveying messages between a STP user and the STP centralised hub and/or between two STP users;
No person shall act as an STP centralised hub or a STP Service provider unless it obtains approval from SEBI to provide such service.
The STP centralised hub shall obtain a digital signature certificate from a Certifying Authority and shall ensure that such digital signature certificate is valid and in force at all times.
The STP centralised hub shall confirm authenticity, integrity and non-reputability of all messages submitted by the STP Service Provider.
The STP centralised hub shall maintain a complete record of the flow of messages processed. The records of the STP centralised hub shall be open for inspection by SEBI or any other person duly authorised by SEBI for this purpose.
The STP centralised hub shall maintain confidentiality of information about its users and shall not divulge the same to other clients, the press or any other person except in accordance with law or as per the directions of any court of law or of SEBI.
The STP service provider shall establish connectivity with the STP centralised hub before providing STP service to its users.
The STP service provider shall abide by the service standards as may be specified by SEBI and / or the STP centralised hub in consultation with the STP service providers.
The STP Service Provider shall obtain a digital signature certificate from a Certifying Authority and submit a copy of the Certificate to the STP centralised hub.
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Source: SecMarx — Straight Through Processing Service in the Indian Securities Market. Verbatim text is public record; SecMarx structuring (linkage to applying orders) is cited to us.