Notice No.   20220726-43   Notice Date   26 Jul 2022
Category   Compliance   Segment   General
Subject   Empanelment of Backoffice vendors
Attachments   Annexure A - Operating Guidelines.pdf ; Annexure III- Undertaking.pdf ; Annexure IV - Vendor Application format.pdf ; Annexure V - Vendor Confirmation.pdf ; Annexure I-Member Application form.pdf ; Annexure II-Auditors Report & Certificate.pdf ;

Trading Members are currently managing their Back office (BO) functions either by an In-house developed software or by availing services of a BO software vendors. In order to achieve uniformity in the formats in which the books and accounts are maintained by the members and to harmonize the formats under which various data is submitted to Exchange, it has been decided to empanel Backoffice vendors. Detailed guidelines in this regard are mentioned as under:

Procedure for Empanelment:

The operating guidelines to be followed by the trading members for registering their BO facility and the process of empaneling BO vendor / In-house developed software is provided in Annexure A.

All members are required to submit the details of the back-office facility currently being used by them. The link for submission of such information through the member portal shall be informed to the members through a separate circular, in due course.

Members developing BO software in-house, may not be required to engage as empanelled vendor with the Exchange. However, for such BO Facility, the Designated Director of the Trading Members shall make an application to the Exchange and provide the undertaking as per the operating guidelines specified in Point-I of Annexure A. The details for submission including the timelines shall be communicated in due course.

BO vendors desirous of registering with the Exchange as empanelled vendors shall submit the application through a trading member who would be carrying out the necessary testing as per the operating guidelines specified in Point II of Annexure A. Exchange may seek additional details as deemed necessary for evaluating the application of the trading member for vendor empanelment. The vendor empanelment applications shall be evaluated based on various parameters inter alia including background/profile, infrastructure, systems etc, some of which are listed below:

1.      Back-ground/profile of the vendor. (In case of newly formed firm /company, the Directors/Partners & KMPs of the firm / company to fulfil the criteria)


·         Organizational structure, Directors/ Partners & KMPs and their background/profile.

·         Details of affiliation with other entities like brokers, including beneficial interests held by / in such brokers.

·         The criteria for considering whether a relevant person is fit and proper which includes honesty, integrity and reputation, competence and capability and financial soundness. The onus is on the vendor to establish that it is a fit and proper person/entity/firm.

·         Relevant disclosures and details, if Directors/Partners & KMPs are debarred by any regulatory authority (worldwide) from rendering services.

·         Relevant disclosures (Conflict of Interest) in case Directors / Partners & KMPs of BO vendors are associated with any member.


2.      Should have adequate infrastructure in terms of:


·         Hardware & software facilities available

·         Communication & networking facilities within the organisation

·         General facilities such as office space and infrastructure

·         Number of qualified staff


3.      Should have required skills within the organization (can be a value-added reseller and must have necessary system integration and porting skills)


4.      Should have sound platforms for the proposed solution.


On receipt of the duly filled application form, undertaking along with other documents as defined in operating guidelines specified in Annexure A and on vendor meeting requirements as specified herein and from time to time the vendor shall be empanelled with the Exchange.


Trading Members, who are currently using the BO facility services are exempted from getting the permission from Exchange, if the current Backoffice Vendor gets himself empanelled with Exchange on or before December 31, 2022. Any new / existing trading member applying for availing Backoffice facility after December 31, 2022, are required to get permission from Exchange for using the empanelled backoffice vendor (New back office / Migration to other Back office) as per Point III of Annexure A.


Empanelment for Backoffice Solutions, CTCL solutions and Internet based trading solutions are separate, and vendors are required to apply separately for empanelment for the same, in accordance with the various circulars issued by the Exchange from time to time.

It may be noted that the BO empanelment by the Exchange do not, in any manner, represent or warrant that the said software shall be free of any error, omission, defect, bugs, shortcoming or limitation of any nature whatsoever. Further, the Member shall be solely liable for all/any dysfunctional, erroneous or disorderly functioning of the BO software and for the consequences arising out of such functioning and the Exchange shall not be responsible for any consequences arising out of such functioning of the BO software. Members shall always ensure that the BO software shall not be used for any purpose that is contrary to applicable Circulars, Byelaws, Rules and Regulations of the Exchange and/or SEBI.

All Trading members are advised to take note of the above and bring the provisions of this circular to the notice of the BO vendors and ensure the conformance and compliances to the above requirements. Utilisation of services of a vendor, for back office, which is not empanelled with the Exchange shall not be permitted from January 01, 2023, onwards.


For any further queries, trading members/vendor may write to us at or call us on 022- 2272 8435/5012/5116.


For and on behalf of BSE Ltd.




Sandeep Sharma                                           Sanjay Pardiwala
Assistant General Manager                         Deputy General Manager
Brokers’ Supervision                                    Trading Operations