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    Sebi sends fresh notices to NSE, key officials

    Synopsis

    This is the second show-cause notice by Sebi to NSE and its top officials — current and former on the matter.

    Sbi--bccl
    Co-location is a setup wherein the broker’s computer is located in the same area in which the stock exchange’s server is located.
    The Securities and Exchange Board of India has issued a fresh show-cause notice to the National Stock Exchange and some of the key officials — including former CEOs Ravi Narain and Chitra Ramkrishna — on Wednesday, asking them to explain the allegations of preferential access to a few high-frequency traders and brokers to its trading platform, said three people close to the development.

    The regulator has also served notices on Ravi Varanasi, the exchange’s chief of business development,Suprabhat Lala, senior vice president—regulatory and investor services cell, former technology heads — Ravi Apte and Umesh Jain, and former chief operating officer Subramanian Anand.

    The notice has also been sent to OPG Securities and technology provider Sampark Infotainment, sources said.

    In May last year, Sebi had set up an internal investigating authority to look into the alleged connivance between NSE officials and brokers who have been accused of misusing the co-location facility.

    This is the second show-cause notice by Sebi to NSE and its top officials — current and formeron the matter. The new show cause notice pertains to alleged connivance between NSE officials and brokers who have been accused of misusing the co-location facility.The earlier one was related to violation of SECC (stock exchanges and clearing corporation) regulations by NSE and its officials.

    The fresh notice has been issued under regulation 3 and 4 of the Fraudulent and Unfair Trade Practices (FUTP) regulations on Wednesday regulations and violation of provisions of Securities Contract (Regulation) Act.

    These regulation prohibits manipulative,fraudulent and unfair trade practices in the securities market.

    The regulator has initiated action under 11B which empowers Sebi to give any directions to the exchange and individuals involved. Sebi had also engaged forensic experts to aid in its investigation in the NSE case.

    The regulator had earlier issued show-cause notices to the exchange and its 14 officials — both former and existing — asking them to explain alleged irregularities in the functioning of the co-location system.

    The case dates back to 2015, when a whistle blower wrote a letter to Sebi alleging that NSE gave preferential access to a few high-frequency traders and brokers to the exchanges’ trading platform.

    Last month,Central Bureau of Investigation filed a case against stock broker Sanjay Gupta, owner of OPG Securities, and unidentified officials at market regulator Sebi and the National Stock Exchange for their alleged role in manipulating the bourse’s systems that gave Gupta trading access a few seconds ahead of other dealers.

    The agency also booked Gupta’s brother-in-law Aman Kokrady, and Ajay Shah, a professor at the National Institute of Public Finance and Policy in the case.

    Co-location is a setup wherein the broker’s computer is located in the same area in which the stock exchange’s server is located. This arrangement gives market participants access to faster systems.

    “The investigating authority conducting the probe has submitted its report. We have initiated enforcement action against the institution and individuals and in the next few days we will complete the enforcement action against various entities which are involved,”Sebi chairman Ajay Tyagi had told reporters after the Sebi board meeting on June 21.



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    Download The Economic Times News App to get Daily Market Updates & Live Business News.

    Subscribe to The Economic Times Prime and read the Economic Times ePaper Online.and Sensex Today.

    Top Trending Stocks: SBI Share Price, Axis Bank Share Price, HDFC Bank Share Price, Infosys Share Price, Wipro Share Price, NTPC Share Price

    ...more
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