MCX Stock Exchange Limited
Market Operations - CTCL Department

Smart Order Routing

For clarifications on the Smart Order Routing circular, members may contact Mukesh Desai 022 – 67319000 (8964) or Pratik Doshi on 022 – 67319000 (8973) or send an email at ctcl@mcx-sx.com. In case of general queries kindly contact Customer Service on 022 - 67319010 or send an email to customerservice@mcx-sx.com for any clarification.

For and on behalf of
MCX Stock Exchange Ltd.

Ayanansu Panda,
Asst. Vice President

MCX Stock Exchange Limited
2nd Floor, Exchange Square, Suren Road, Chakala, Andheri (East), Mumbai - 400 093
Tel.: 022 – 6731 9000 , Fax: 022 - 6726 9575
Website: www.mcx-sx.com, email: customerservice@mcx-sx.com

From: …………………………………………………………… (Name of Member)

Member ID: ………………………………

To:
MCX Stock Exchange Limited.
2nd Floor, “Exchange Square”,
Suren Road, Chakala, Andheri (East),          
Mumbai – 400 093.

Sub:  CTCL ID to be used for Smart Order Routing

Please enable the facility of Smart Order Routing on following CTCL user ID.

CTCL ID: ……………………………

Approved User Name: …………………...

CTCL Smart Order Routing Software Name: .……………………..
Version Number: ………………………….
Vendor Name: ………………………….

For
(Name of the Member)

Authorised signatory
(Name and designation)

Date:

Place:

Vendor Certificate for Smart Order Routing System
(On letterhead of the Vendor)

I / We ------------------------------------------, having our registered office at ---------------------------------------and represented by ------------------- (hereinafter referred to as VENDOR) have sold to M/s. ---------------------------------, having their registered office at ------------------------------ being a Member of MCX Stock Exchange Limited, (hereinafter referred to as MEMBER), a software for Smart Order Routing (SOR).

WE confirm that, the software provided by us complies with the following provisions in particular as required by the MCX-SX/SEBI:-.

1. The software application used for SOR facility adheres to the best execution policy of the Member and would route orders in a neutral manner. The software application used for Smart Order Routing ensures that Smart Order Routing is not used to place orders at venues other than the recognized stock exchange and that we shall ensure that all orders entered into the smart order routing system are offered to the market for matching and no cross trades are generated.
2. Adequate risk monitoring and control measures have been incorporated in the system and are in compliance with the requirements prescribed by SEBI and MCX-SX.
3. The member's server internally generates unique numbering for all client orders/ trades and provision for maintenance of all transactions / activities / alerts log with audit trail is available.

Date:

Annexure III

Trading Member’s Undertaking for use of Smart Order Routing

I / We…………………………………………., an individual / a firm registered under the Indian Partnership Act, 1932 / a Company / body corporate incorporated under the Companies Act of 1956 / and residing at / having  registered  office at ...…………………………………… give this UNDERTAKING on this ………….day of ……………… 20…. at …………………….... IN FAVOUR of MCX Stock Exchange Limited, a company incorporated under the Companies Act of 1956, with registered office at 2nd Floor, Exchange Square, CTS No.255, Suren Road, Andheri (East), Mumbai-400 093, India (hereinafter referred to as ‘Exchange’)

1. The Exchange has provided trading software to enable its members to trade on the Exchange.
2. The Exchange has allowed its trading members with prior approval, to use front end software like Computer-to-Computer Link (hereinafter referred to as the ‘CTCL’) to facilitate them to trade on the Exchange trading system.
3. The Exchange has prescribed framework for the users of CTCL, to place orders, through Smart Order Routing system / software which would allow the Member’s Trading Engines to systematically choose the execution destination based on relevant factors such as price, costs, speed, likelihood of execution and settlement, size, nature or any other consideration relevant to the execution of the order.
4. The Member is desirous of providing the Smart Order Routing facility to constituents in compliance with the relevant Circulars of SEBI and the Exchange.

Signature**

(**To be signed by the person(s) signing the Undertaking)

Annexure IV

This agreement is made and executed at ……….…… this .…….. day of ……….…… 20………

Between:

Mr./ Ms./ M/s. ……………………………….., an individual / a sole proprietary concern / a partnership firm / a body corporate, registered / incorporated under the provisions of the Indian Partnership Act, 1932 / the Companies Act, 1956, being a member of the MCX Stock Exchange Ltd. (hereinafter called “the Exchange”), and having his / her / its registered office at ……………………………………………………………...........................................................................................................
…………………………………...................................................................................................…. (hereinafter called “the Trading Member”) which expression shall, unless repugnant to the context or meaning thereof, be deemed to mean and include himself in the capacity of a Trading Member while trading in the Currency Derivatives Segment, his/her heirs, executors, administrators and legal representatives/the partners for the time being of the said firm, the survivor or survivors of them and their respective heirs, executors, administrators and legal representatives/its successors, as the case may be, of the One Part;

And

Mr./Ms/M/s. ………………………………, an individual / a sole proprietary concern/  a partnership firm/a body corporate, registered / incorporated, under the provisions of the Indian Partnership Act, 1932 / the Companies Act, 1956, having his / her / its residence / registered office at ……………………………………………………………………………….…………
……………………………………………………………………………………………………………….(hereinafter called “the Constituent”) which expression shall, unless repugnant to the context or meaning thereof, be deemed to mean and include his/her heirs, executors, administrators and legal representatives/the partners for the time being of the said firm, the survivor or survivors of them and their respective heirs, executors, administrators and legal representatives/its successors, as the case may be, of the Other Part.

The Trading Member and Constituent shall hereinafter jointly be referred to as the "Parties” and severally as the “Party”.

Whereas the Trading Member is registered as the trading member of the Exchange with SEBI registration number ______________________________ in the Currency Derivatives Segment.

1. Whereas the Exchange has permitted the Trading Member to provide Smart Order Routing facility to its Constituents, which would allow the Trading Members trading engines to systematically choose the execution based on factors such as price, cost, speed, likelihood of execution and settlement, size, nature or any other consideration relevant to the execution of the order, in accordance with its best execution policy.
2. The Trading Member is also a trading member of the _______ and _____________
3. Whereas the Constituent is desirous of using Smart Order Routing facility offered by the Trading Member.
4. The Constituent is aware that the orders placed through the Smart Order Routing system of the Trading Member may get routed to and executed at another recognized stock exchange in which he is a Trading Member, in which case the transaction would be subject to the Bye-laws, Rules and Regulations of that recognized stock exchange.
5. Whereas the Trading Member has explained its best execution policy and features of its Smart Order Routing facility to the Constituent.

1. The Trading Member and Constituent agree that all the rights and obligations of both the Parties as per model Member Constituent Agreement dated ________executed between them and provisions thereof shall continue to be binding on them.
2. The Trading Member agrees that execution of Constituent orders placed through the Smart Order Routing system is in accordance with its best execution policy which is attached as Annexure 1 herewith.
3. The Trading Member and the Constituent agree to be bound by all the Rules, Byelaws and Regulations of the Exchange and circulars issued there under and Rules and Regulations of SEBI and relevant notifications of Government authorities as may be in force from time to time.
4. The Trading Member represents that it has formulated its best execution policy in accordance with requirements provided by SEBI/Exchanges from time to time.
5. The Trading Member agrees to ensure that the orders placed through Smart Order Routing facility are routed in a neutral manner.
6. The Trading Member agrees to give an advance notice of at least 15 days prior to implementation of any material change in its order execution policy.
7. The Trading Member agrees to demonstrate to the Constituents at the request, that it had ensured execution of Constituents orders in accordance with its best execution policy.
8. In case the Constituent does not want to use the Smart Order Routing facility for a particular order, Trading Member agrees to carry out instructions of the Constituent and ensure that the same is well documented.
9. The Trading Member agrees to ensure that alternative mode of trading system is available in case of failure of Smart Order Routing facility and that such alternative mode is used under intimation to the Constituent.
10. The Trading Member agrees to maintain logs of all activities to facilitate audit trail. Trading Member agrees to maintain record of orders, trades and data points for the basis of decision.
11. The Trading Member and the Constituent are aware of the Bye-laws, Rules and Regulations of the Exchange relating to dispute resolution through arbitration mechanism of the Exchange and agree to abide by the said provisions.

This agreement may be altered, amended and / or modified by the parties mutually in writing without derogating from the contents of this Agreement.

Provided however, if the rights and obligations of the parties here to are altered by virtue of change in Rules, Byelaws and Regulations of the Exchange and Circulars issued there under and Rules or Regulations of SEBI and/ or any notifications or instruction of any Government authority, such changes shall be deemed to have been incorporated herein in and this Agreement shall be deemed to have been modified accordingly.

IN WITNESS WHEREOF the parties to the Agreement have caused these presents to be executed as of the day and year first above written.