 Ref. No.: 02384/OTC/Circ/2004/95 Date: 14th July, 2004 To: All Members and Dealers Dear Sir, We are in a receipt of Circular No. DNPD/14785/04 dated July 8, 2004 from SEBI regarding clarifications issued for system of Straight Through Processing (STP). You are requested to comply with the same. Thanking you. Yours faithfully, For OTC Exchange of India R.Anand Asst. Vice President
CHIEF
GENERAL MANAGER DERIVATIVES
AND NEW PRODUCTS DEPARTMENT DNPD/14785/04
July 8, 2004 To All
Exchanges, Clearing House / Corporation, STP centralised
hub, STP service providers, custodians, AMFI Sub: Clarification for circular no. DNPD/Cir-25/04 dated June 10, 2004 Dear
Sir, 1)
This is a clarification to our previous circular no.
DNPD/Cir-25/04 dated June 10, 2004 which outlined the
transaction work flow for the system of Straight Through
Processing (STP) in the Indian Securities Market and
standardisation of the messaging formats. 2)
The
circular prescribed a standardized transaction work flow for
the STP system whereby STP users shall be required to use
IFN 515 messaging standard for issue of contract note, IFN
548 / 598 for confirmation of the contract note by the
custodian / fund manager to the broker and messaging formats
IFN 540 to 547 for settlement instructions and their
confirmations between the fund manager and the custodians
for settlement of such trades. 3)
It is reiterated that the messaging formats
prescribed for STP in India is based on the internationally
accepted ISO 15022 messaging standards. However the
descriptors for each messaging format had been formulated in
a manner to describe the practices followed in the Indian
securities’ market (from the perspective of settlement
obligation of a stock broker). However it has been observed
that that there has been some confusion in certain sections
of the market with respect to the intended use of the
messaging format on account of the messaging descriptors. 4)
Accordingly it is clarified that the descriptors as
stated in the said circular shall mean the following: a) IFN 540: settlement instruction for a buy trade free of payment b) IFN 541: settlement instruction for a buy trade against payment c) IFN 542: settlement instruction for a sell trade free of payment d) IFN 543: settlement instruction for a sell trade against payment e) IFN 544: confirmation of a settlement instruction for a buy trade
free of payment (response to IFN 540) f) IFN 545: confirmation of a settlement instruction for a buy trade
against payment (response to IFN 541) g) IFN 546: confirmation of a settlement instruction for a sell trade
free of payment (response to IFN 542). h) IFN 547: confirmation of a settlement instruction for a sell trade against payment (response to IFN 543) 5) It is also clarified that in the IFN 515 message, if the trade is
intended to be settled by the custodian with the Clearing
Corporation (by accepting the settlement obligation), then
it shall be termed as "FREE" and if the trade is
intended to be settled by the broker with the Clearing
Corporation then it shall be termed as "APMT"
(meaning against payment) in the tag 22H of the IFN 515
message. Yours
sincerely, N.
PARAKH
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