Quick summary
SEBI is proposing to transition from a centralized STP Hub model to a decentralized, API-based framework for trade processing. This change aims to reduce latency and transmission costs, mitigate concentration risk associated with a single hub, and enhance overall service delivery for market participants.
Who is affected
- STP Service Providers (SSPs): Required to implement standardized API endpoints.
- Market Participants: Stock brokers, custodians, and institutional investors (though no system changes are required for these users).
- Market Infrastructure Institutions (MIIs): Responsible for formulating Standard Operating Procedures (SOPs) via the Industry Standard Forum (ISF).
What changes
- Decentralization: The existing STP Centralized Hub will be removed and replaced by direct API-based connectivity between SSPs.
- Operational Efficiency: Introduction of an optional API-based message exchange for users serviced by the same SSP to minimize human error.
- Standardization: The Industry Standard Forum (ISF) will define messaging formats and operational protocols to ensure interoperability and security.
- System Impact: The proposal does not require system changes for STP users (brokers, fund houses, custodians).
Action items
- Public Comments: Submit feedback on the draft circular by June 9, 2026, via the SEBI online web-based form.
- Technical Support: If experiencing issues with the web form, email comments to the designated SEBI officials (Darshil Bhatt, Harshad Patil) and the mrd_tpd@sebi.gov.in inbox with the subject: “Easing of framework for Straight Through Processing (STP) of trades”.
- Planning: MIIs/ISF must submit a plan to SEBI within three months for the optional API-based information exchange.
Key dates-deadlines
- June 9, 2026: Deadline for public comments.
- Within 3 months of circular issuance: Deadline for ISF to submit an implementation plan for optional API-based information exchange.
Source reference
SEBI/HO/MRD/TPD-1/P/CIR/2026 (May 19, 2026)