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    Gyra Tyi
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    The document outlines the prerequisites for stock brokers to obtain permission for Smart Order Routing (SOR) from stock exchanges. Brokers must submit their SOR system to a third party audit, provide features of SOR to the exchange, maintain logs and records, and ensure alternative trading systems are available. Permission for SOR will be granted within 30 days if the broker's software passes the exchange's audit in test environments and all SEBI and exchange requirements are met.

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    The document outlines the prerequisites for stock brokers to obtain permission for Smart Order Routing (SOR) from stock exchanges. Brokers must submit their SOR system to a third party audit, provide features of SOR to the exchange, maintain logs and records, and ensure alternative trading systems are available. Permission for SOR will be granted within 30 days if the broker's software passes the exchange's audit in test environments and all SEBI and exchange requirements are met.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPTX, PDF, TXT or read online from Scribd
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    Download as pptx, pdf, or txt
    20 views2 pages

    Presentation 19

    Uploaded by

    Gyra Tyi
    The document outlines the prerequisites for stock brokers to obtain permission for Smart Order Routing (SOR) from stock exchanges. Brokers must submit their SOR system to a third party audit, provide features of SOR to the exchange, maintain logs and records, and ensure alternative trading systems are available. Permission for SOR will be granted within 30 days if the broker's software passes the exchange's audit in test environments and all SEBI and exchange requirements are met.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPTX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as pptx, pdf, or txt
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    Stock broker If interested to offer SOR facility shall apply to the respective stock exchanges.

    Stock broker shall submit a third party system audit of its SOR system and software. Stock exchanges shall disseminate to its stock brokers a list of approved system auditors (CISA or equivalent) qualified to undertake such system audits. Should provide an undertaking to the respective stock exchanges that SOR shall route orders in a neutral manner. Provide the features of the Smart Order Routing to stock exchange. Shall enter into a specific agreement with the client to provide Smart Order Routing facility. Shall maintain logs of all activities to facilitate audit trail. Shall maintain record of orders, trades and data points for the basis of decision. Shall ensure that alternative mode of trading system is available in case of failure of Smart Order Routing facility. Shall carry out appropriate validation of all risk parameters before the orders are placed in the Smart Order Routing system.

    Broker-client agreement shall clearly describe the features of the Smart Order
    Routing facility and the obligations and rights associated with Smart Order Routing facility

    Prerequisites to granting of permission for Smart Order Routing(SOR):


    The software and systems proposed for SOR shall be duly certified by BSE-empanelled System Auditor before grant of permission. Only on fulfillment of the requirements mentioned in the SEBI / BSE Circulars, permission for commencing Smart Order Routing (SOR) would be granted to the Trading Member which will be within 30 calendar days of the date of receipt of application as suggested by SEBI. BSE shall provide a test environment during a pre-specified time. The trading Members are required to test their software using the said test environment.

    Areas covered under Audit checklist Operational Specifications Audit Trails Risk Management Password Security Session Security Physical and Database Security Network Security Backup & Recovery Procedures Business Continuity & Disaster Recovery Procedures

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