Sebi fines NSE, Ramakrishna, Narain in co-location case

NEW DELHI: In the high profile co-location case, markets regulator Sebi on Wednesday imposed a penalty of Rs 1 crore on the NSE for failing to provide a level-playing field for trading members subscribing to its tick-by-tick (TBT) data feed system.

In addition, the regulator levied a fine of Rs 25 lakh each on NSE's former managing directors and chief executive officers Chitra Ramakrishna and Ravi Narain.

Alleged lapses in high-frequency trading offered through NSE's co-location facility came under the scanner of the watchdog after a complaint was filed in 2015.

The National Stock Exchange of India (NSE) co-location facility allows stock brokers to take on rent specific racks and co-locate their servers and systems within the exchange premises

he primary objective of co-location services of the NSE is to reduce latency for connectivity to the exchange's trading systems for Direct Market Access (DMA), algo trading and Smart Order Routing (SOR).

In its 96-page order, Sebi said that unequal access was apparent at different stages of the technology process and NSE as a stock exchange failed to ensure a level-playing field for trading members subscribing to its TBT data feed system.

Tick-by-Tick (TBT) data feed provides information regarding every change in the order book.

According to the regulator, many trading members had repeatedly resorted to accessing the secondary server without any checks and balances and actions on the part of the first- level regulator except for certain emails or advisories.

The NSE flouted the principles underlying the conduct of business of a stock exchange, pertaining to fair and equitable access to information.