NSE, FORMER CHIEFS FINED BY REGULATOR IN CO-LOCATION CASE
NEW DELHI: In the high-profile co-location case, markets regulator Sebi on Wednesday imposed a penalty of ₹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 ₹25 lakh each on NSE’S former managing directors and CEOS Chitra Ramakrishna and Ravi Narain. Alleged lapses in high-frequency trading offered through the NSE’S co-location facility came under the scanner after a complaint was filed in 2015. The NSE co-location facility allows stock brokers to take on rent specific racks and co-locate their servers and systems within the exchange premises.
The 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. TBT data feed provides information regarding every change in the order book.