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TMI BlogStraight Through Process ing Service in the Indian Securities MarketX X X X Extracts X X X X X X X X Extracts X X X X ..... lso prescribes the model agreement between the STP centralised hub and the STP service providers. (3) The STP guidelines prescribes the eligibility criteria and conditions of approval for the STP centralised hub and the STP service providers, obligations and responsibilities of the STP centralized hub and the STP service providers and code of conduct for the STP service providers. The STP centralised hub and the STP service providers shall abide by these Guidelines. (4) To prescribe contractual obligations between the STP centralised hub and the STP service providers and to facilitate standardisation of service, a model agreement between the STP centralised hub and the STP service providers has also been prescribed by SEBI and is prescribed as Schedule II of the STP Guidelines. The agreement between the STP centralised hub and the STP service provider shall include the provisions included in the model agreement. (5) This circular is being issued in exercise of powers conferred by section 11(1) of the Securities and Exchange Board of India Act, 1992, read with section 10 of the Securities Contracts (regulation) Act 1956, to protect the interests of investors in securities and to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ontracts (Regulation) Act, 1956 or in any rules or regulations made thereunder, shall have the meanings respectively assigned to them in such Acts, rules or regulations. 3. Eligibility criteria for STP centralised HUB and STP service providers (1) No person shall act as an STP centralised hub or a STP Service provider unless it obtains approval from SEBI to provide such service. (2) For the grant of a certificate of approval SEBI shall take into account the following : i. whether the applicant is a person or entity with a minimum networth as may be prescribed from time to time. ii. whether the applicant has adequate infrastructure facilities setup in India like office space, equipment and manpower with adequate experience in dealing in securities market and adequate expertise in providing necessary services and software solutions. 4. Obligations and responsibilities of STP centralised HUB (1) The STP centralised hub shall comply with the following :- i. The STP centralised hub shall at all times comply with the requirement of eligibility criteria, specified by SEBI. ii. The STP centralised hub shall abide by all the provisions of the Act, Rules, Regulations, Guidelines ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any court of law or of SEBI. xvi. The STP centralised hub may charge reasonable fees from the STP service providers. 5. Obligations and responsibilities of STP service provider (1) The STP Service provider shall comply with the following :- i. The STP service provider shall at all times comply with the requirement of eligibility criteria, specified by SEBI. ii. The STP service provider shall establish connectivity with the STP centralised hub before providing STP service to its users. iii. The STP service provider shall provide the necessary details of the STP users connected with it and all its details to the STP centralised hub for the purpose of creating and maintaining a directory of STP service providers and STP users. iv. The STP service provider shall comply with the minimum specifications specified by the STP centralised hub and as may be mutually agreed upon. v. 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. vi. The STP Service provider shall obtain a digital signature certificate from a Certifying Authority and submit a copy of the Certi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... est of its ability in the same manner, diligence, speed and with all checks and balances as if the message is to be delivered/received by the same service provider. (2) Nothing in these guidelines shall exempt the STP service provider from discharging any obligations placed on it by any law, regulations and guidelines. 6. Conditions of approval for STP centralised HUB and STP service providers (1) Terms of approval : i. The approval by SEBI shall be for an initial period of five years for STP centralised hub and for a period of three years for STP service providers and must be renewed periodically. ii. The STP centralised hub and STP service provider must ensure continuous validity of approval by SEBI in order to function as a STP service provider. iii. The Board shall have the right to suspend/ cancel the approval of the STP centralised hub and/or STP service provider in case of violation of the terms of the guidelines. 7. Code of conduct for STP service providers Every STP service provider shall abide by the Code of Conduct as specified in Schedule I. 8. Model agreement The STP centralised hub shall enter into an agreement with every STP service provider on the lines ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e deemed to include its successors, legal representatives and assigns) of the First Part; And ........................................ a company incorporated under the Companies Act, 1956 and having its registered office at .......................................... (hereinafter referred to as the 'STP Service Provider' which expression shall unless it be repugnant to the context or the meaning thereof, be deemed to include its successors, legal heirs, legal representatives and assigns as the case may be) of the Second Part. Whereas 1. The Securities and Exchange Board of India has mandated Straight Through Processing (hereinafter referred to as 'STP') for facilitating settlement of institutional trades. 2. In terms of the Securities and Exchange Board of India (STP Centralised Hub and STP Service Providers) Guidelines, 2004 an agreement has to be entered into between the STP Centralised Hub and the STP Service Provider. 3. The STP centralised hub has obtained such approval/s as may be necessary to function as a centralised hub. Now this agreement witnesseth and it is hereby agreed by and between ............. and .............. as under : A. Definitions 1. DoT means Depar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng the STP Centralized hub client software is the legal property of STP centralized hub. The permission given by STP centralised hub to access and use STP Centralized Hub through the STP Centralized hub client software will not convey any proprietary or ownership rights in the above software. The access of the STP Service Provider is limited to the STP Centralized hub Client software. 6. The STP Service Provider shall not attempt to modify, translate, disassemble, decompile or reverse engineer Centralized the STP Centralized hub client software or create any derivative product based on that software. 7. The STP Service Provider shall have a non-exclusive right to access STP Centralized Hub through the STP Centralized hub client software. This right is not transferable under any circumstances and shall be used by the STP Service Provider itself or by its authorized agent as may be mutually agreed. 8. The STP Service Provider shall not use the infrastructure or the facilities provided by STP centralised hub for any other purpose other than those mentioned in this Agreement. 9. The STP Service Provider shall indemnify STP centralised hub against any damage, loss, expenses, cos ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alised hub agrees to PKI enable the STP Hub client software within .......... months after the agreement would come into force. STP centralised hub shall digitally sign all messages at STP Centralized Hub prior to sending it to STP Service Providers. Hub client software will maintain unsigned logs of such events. 12. STP centralised hub shall indemnify the STP service provider against any damage, loss, expenses, costs etc. incurred by it due to its negligence (intentional or unintentional). STP centralised hub shall not use the infrastructure or the facilities provided by STP service provider for any other purpose other than those mentioned in this Agreement. 13. Hub client software provided by STP centralised hub will ensure that : a. No damage will be caused to the service providers system. b. It will not propagate virus infected information. c. It will pass on only relevant information to be exchanged with the other STP service provider. d. It will not try to probe any other information available on the STP Service Providers setup. e. It will not try to modify, translate, disassemble, de-compile or reverse engineer the software to gain access to restricted informatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l be resolved by mutual discussion. In the event the parties are not able to settle the same within the time frame agreed between the parties either party may, by written notice of 30 days sent to the other party, temporarily suspend the arrangements, in whole or in part, till the parties find a technical solution to the security and technical issues. The notice of termination shall specify the termination is at whose instance, the extent to which performance of the agreement is suspended, and the date upon which such suspension becomes effective. F. Force Majeure If the performance of any obligations by any party as specified in this agreement is prevented, restricted, delayed or interfered by reason of force majeure then notwithstanding anything hereinbefore contained, the party affected shall be excused from its performance to the extent such performance relates to such prevention, restriction, delay or interference and provided the party so affected uses its best efforts to remove such cause of non-performance and when removed the party shall continue performance with utmost urgency. For the purpose of this clause "Force Majeure" means and includes fire, explosion, cyclone, f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he ISP license of STP centralised hub is revoked or the services are taken over by DoT/Telecom Authority in the event of an emergency or otherwise. If STP centralised hub receives prior notice of the same it shall be provided to the service provider immediately. 4. This agreement may, for convenience, at any time during its term, be terminated by either party, by a written notice of 90 days to the other party. 5. The provisions contained hereinabove shall not preclude the other party from recourse to any other remedies available to itself by statute or otherwise, at law or in equity. 6. In order to maintain the security and integrity of its infrastructure STP service provider may also suspend the STP hub client software acces to its system at any time without notice. I. Notice Any notice to be given by one party to the other pursuant to this agreement shall be sent by registered post A.D., speed post or facsimile transmission to the address mentioned below : 1. ................. (Name of the STP centralised HUB) ....................(Address) 2. .............................(Name of STP service provider) .................................(Address) J. Waiver of rights No ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... part thereof to any third party. The terms of this clause shall survive termination of the agreement. The obligations shall not apply with respect to Information which : (1) is or becomes publicly available other than through a breach of this Agreement or is unlawfully appropriated; (2) is already in the possession of the other party without any breach of this Agreement; (3) is obtained by the other party from a third party without any breach of this Agreement. (4) is required to be produced before a judicial authority and only where the other party is compelled to do so by such an authority, provided that the said authority (or individual representing such authority) has the authority, under the laws in force, to compel such disclosure. Notwithstanding the foregoing, before making any use or disclosure on any of the foregoing exceptions, the Party disclosing such information shall intimate the other party as soon as practicable the applicable exceptions (s) and circumstances giving rise thereto. Annexure STP centralised hub shall charge a fee of Rs. .................. The fees shall be charged to the sending service provider. The billing shall be on a ................ ..... X X X X Extracts X X X X X X X X Extracts X X X X
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