SEBI proposes scrapping centralised STP hub, plans API-based framework for faster trade processing
STP is an automated mechanism that enables end-to-end processing of financial transactions without manual intervention. SEBI has proposed replacing the centralised STP Hub with a direct API-based framework to reduce costs, improve efficiency and speed up trade processing.
- May 19, 2026,
- Updated May 19, 2026 6:43 PM IST
The Securities and Exchange Board of India (SEBI) has proposed a major overhaul of the country’s Straight Through Processing (STP) framework by eliminating the existing centralized STP Hub and replacing it with a direct Application Programming Interface (API)-based connectivity model between STP Service Providers (SSPs). The move is aimed at reducing latency, lowering costs and improving efficiency for market participants.
The proposal was released through a consultation paper seeking public feedback on changes intended to modernize the two-decade-old architecture used in Indian capital markets for processing trade-related messages.
Straight Through Processing is an automated mechanism that enables end-to-end processing of financial transactions without manual intervention. It is used for various communications among stock brokers, custodians and institutional investors, including Electronic Contract Notes (ECNs) and trade confirmations. SEBI had originally established the framework through circulars issued in 2004.
Under the current structure, information flows through a centralised STP Hub whenever different STP Service Providers communicate with each other. According to SEBI, this architecture creates additional processing steps, increases message transmission time and results in higher charges due to hub usage.
The regulator also highlighted broader structural concerns. Based on transaction analysis between April and December 2025, SEBI found that nearly 95–99% of STP traffic was routed through a single SSP, creating significant concentration risk. It warned that dependence on one dominant provider and a centralized hub structure could lead to a potential single point of failure in the system.
To address these issues, SEBI has proposed replacing the hub with a decentralized API-based model that would enable SSPs to communicate directly through standardized interfaces and protocols. Under the proposed mechanism, Electronic Contract Notes uploaded by brokers would move directly between service providers without passing through a centralized intermediary. The regulator said the revised system would involve fewer message exchanges, improving speed and scalability.
SEBI said the proposed changes would not require any system modifications for end-users such as stock brokers, custodians, institutional investors or fund houses. The regulator also believes the revised structure may encourage participation by additional SSPs and reduce overdependence on a few large players.
Additionally, SEBI has proposed an optional API-based message exchange mechanism for users operating under the same SSP. This is expected to reduce reliance on manual upload and download processes and minimize human errors.
The Industry Standards Forum (ISF) will formulate operational procedures and messaging standards in consultation with SEBI. Public comments on the proposal have been invited until June 9, 2026.
The Securities and Exchange Board of India (SEBI) has proposed a major overhaul of the country’s Straight Through Processing (STP) framework by eliminating the existing centralized STP Hub and replacing it with a direct Application Programming Interface (API)-based connectivity model between STP Service Providers (SSPs). The move is aimed at reducing latency, lowering costs and improving efficiency for market participants.
The proposal was released through a consultation paper seeking public feedback on changes intended to modernize the two-decade-old architecture used in Indian capital markets for processing trade-related messages.
Straight Through Processing is an automated mechanism that enables end-to-end processing of financial transactions without manual intervention. It is used for various communications among stock brokers, custodians and institutional investors, including Electronic Contract Notes (ECNs) and trade confirmations. SEBI had originally established the framework through circulars issued in 2004.
Under the current structure, information flows through a centralised STP Hub whenever different STP Service Providers communicate with each other. According to SEBI, this architecture creates additional processing steps, increases message transmission time and results in higher charges due to hub usage.
The regulator also highlighted broader structural concerns. Based on transaction analysis between April and December 2025, SEBI found that nearly 95–99% of STP traffic was routed through a single SSP, creating significant concentration risk. It warned that dependence on one dominant provider and a centralized hub structure could lead to a potential single point of failure in the system.
To address these issues, SEBI has proposed replacing the hub with a decentralized API-based model that would enable SSPs to communicate directly through standardized interfaces and protocols. Under the proposed mechanism, Electronic Contract Notes uploaded by brokers would move directly between service providers without passing through a centralized intermediary. The regulator said the revised system would involve fewer message exchanges, improving speed and scalability.
SEBI said the proposed changes would not require any system modifications for end-users such as stock brokers, custodians, institutional investors or fund houses. The regulator also believes the revised structure may encourage participation by additional SSPs and reduce overdependence on a few large players.
Additionally, SEBI has proposed an optional API-based message exchange mechanism for users operating under the same SSP. This is expected to reduce reliance on manual upload and download processes and minimize human errors.
The Industry Standards Forum (ISF) will formulate operational procedures and messaging standards in consultation with SEBI. Public comments on the proposal have been invited until June 9, 2026.