The Securities and Exchange Board of India (SEBI), on May 19, 2026, issued a consultation paper proposing significant changes to the existing Straight Through Processing (STP) framework for trades in the Indian capital markets. The proposals aim to reduce latency and transaction costs, improve service delivery, and enhance operational efficiency for market participants such as stock brokers, custodians, and institutional investors.
SEBI has proposed discontinuing the existing centralized STP Hub architecture and replacing it with a decentralized API-based connectivity framework between STP Service Providers (SSPs). Under the proposed model, SSPs would establish standardized API endpoints to facilitate direct and secure exchange of Electronic Contract Notes (ECNs) and related acknowledgements without routing through a central hub. The regulator observed that more than 95%-99% of STP messages currently flow through a single SSP, creating concentration risk and a potential single point of failure, while also increasing latency and transmission costs.
The consultation paper further proposes introduction of optional API-based message exchange facilities for STP users serviced by the same SSP, in addition to the existing upload/download mechanism, to reduce manual intervention and improve security. SEBI has invited public comments on the draft circular and stakeholders may submit their suggestions through the online consultation portal or via email on or before June 9, 2026.
