Insta
SEBI Bans NSE From Capital Markets For Six Months In Co-Location Scam; Imposes Rs 624.89 Crore Penalty
A trader at his desk viewing stock prices. (Indranil Bhoumik/Mint via Getty Images)
India’s securities regulator SEBI on Tuesday (30 May) debarred the country’s largest stock exchange NSE from accessing the capital markets for six months and imposed a massive fine of Rs 624.89 crore for giving preferential access and speed to specific traders over others, reports Economic Times (ET).
“NSE has committed a fraudulent and unfair trade practice as contemplated under the SEBI (PFUTP) Regulations. It is established beyond doubt that NSE has not exercised the requisite due diligence while putting in place the TBT architecture," said G Mahalingam, whole-time member of Sebi in the order.
Tick-by-Tick (TBT) refers to the data feed which informs traders regarding every change in NSE’s order book.
According to the Securities and Exchange Board of India's (SEBI) estimates, National Stock Exchange (NSE) netted a profit of Rs 624.89 crore during 2010-11 to 2013-14 from its co-location scam.
Preferential Access
The NSE co-location scam relates to allegations of market manipulation at NSE by some members of the exchange by front running other members through faster access to market price information. The allegations first surfaced after a whistle-blower wrote a letter in 2015 on the modus operandi of the market manipulation.
The regulator has further directed the exchange to deposit the fine with an interest of 12 per cent per annum to its Investor Protection and Education Fund (IPEF).
Responding to the Sebi order, NSE spokesperson stated, "NSE is in the process of examining SEBI Order passed today and will take appropriate steps as may be legally advised."
Support Swarajya's 50 Ground Reports Project & Sponsor A Story
Every general election Swarajya does a 50 ground reports project.
Aimed only at serious readers and those who appreciate the nuances of political undercurrents, the project provides a sense of India's electoral landscape. As you know, these reports are produced after considerable investment of travel, time and effort on the ground.
This time too we've kicked off the project in style and have covered over 30 constituencies already. If you're someone who appreciates such work and have enjoyed our coverage please consider sponsoring a ground report for just Rs 2999 to Rs 19,999 - it goes a long way in helping us produce more quality reportage.
You can also back this project by becoming a subscriber for as little as Rs 999 - so do click on this links and choose a plan that suits you and back us.
Click below to contribute.
Latest
