OPERATIONAL ISSUES: NSE’S PUBLIC LISTING MAY BE DELAYED

MUMBAI :The initial public offering (IPO) of National Stock Exchange of India’s shares will likely be delayed till the bourse resolves the allegations of providing unfair access to certain brokers in its co-location platform and has a full-time chief executive officer in place.

“NSE doesn’t want to list before the allegations related to colo (co-location) are resolved. So the IPO may take some time,” said Ajay Tyagi, chairman of the Securities and Exchange Board of India (Sebi) while answering questions at a press conference.

Co-location refers to trading members locating servers on the premises of the exchange. This reduces the time taken for an order to travel to the exchange, giving them a speed advantage.

Sebi’s technical advisory committee (TAC) examination and a forensic audit of the NSE trading systems showed that its algorithmic trading platform and co-location facility were “prone to manipulation” and allowed “potential preferential access” to some brokers, according to NSE’s draft prospectus.

In its IPO papers NSE, had disclosed the key findings of forensic audit done by Deloitte India and said that revenues from the co-location services since September 2016 are placed in a separate account. “Sebi is not in favour of releasing the funds frozen in the escrow account till the Sebi investigation reaches a conclusion,” said a person aware of the development. NSE declined to comment. Another impediment to a quick IPO is the lack of a CEO. Sebi is yet to clear Vikram Limaye’s appointment to the CEO post of NSE. Tyagi said the regulator had some concerns.