XSstp: Membership Criteria

 

Indian Markets have already moved to T+3 rolling settlement cycle in line with global markets. SEBI in its effort to further increase the efficiency and reduce the settlement period to T+1 has initiated Straight Through Processing (STP) in the capital market. SEBI had constituted a Committee on STP to identify the areas that involve manual intervention, establish messaging standards for information communication and identify options for a communications back bone that will enable data transfer across the participants in a secure and efficient manner.

 

NSE.IT on its part has taken the initiatives to create XSstp, a messaging network for STP which includes an application and the infrastructure that would create, sign and deliver the message in the standard format prescribed by SEBI to other market participants. NSE.IT is uniquely positioned to be a service provider as it has already developed similar messaging systems such as payment gateway and PKI based solutions, which form key components of the proposed STP solution. Further, NSE.IT has skills in Internet based applications including ASP (Application Service Provider) model services. The above domain experience which NSE.IT has in its possession and qualifies it to be an ideal candidate for providing the XSstp service.

 

The following entities can be part of this messaging network:

 

Custodian: A SEBI registered entity that performs the clearing and settlement activity for Fund Managers and large institutional investors

Trading Member: Any SEBI registered member of the Stock Exchanges who is eligible to trade on the Exchange.

Client: An institutional investor whose clearing and settlement activity is performed through a custodian

The key features of the system are as follows:

        End to end automated online message flow

        All participants on a common nationwide network

        All messages confirming to ISO 15022 message standard

        Secured transmission with authentication and encryption

        High availability of the system

        Multiple connectivity options

        Use of digital certificates for non repudiation comprehension

        Comprehensive audit trail

 

 

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