Sebi Clears NSE, Ex-Executives in Colocation Case; Orders OPG Securities to Disgorge Rs 85 Crore
The Securities and Exchange Board of India (Sebi) has cleared the National Stock Exchange (NSE) and seven of its former executives, including Chitra Ramkrishna, Ravi Narain, and Anand Subramanian, of collusion allegations in the colocation case due to insufficient evidence. Sebi acknowledged lapses at NSE’s colocation (colo) facility but found no proof of “collusion” or “connivance” with stock broker OPG Securities, which unfairly accessed the exchange’s secondary server.
Kamlesh Varshney, Sebi’s whole-time member, stated in an 83-page order that the evidence was inadequate to establish collusion. This decision potentially closes a controversial chapter in the capital market, which had tarnished the reputation of NSE’s former executives and delayed its public listing plans. Charges were also dropped against Ravindra Apte, Umesh Jain, Mahesh Soparkar, and Deviprasad Singh.
In a separate 238-page order, Sebi directed OPG Securities to disgorge Rs 85 crore, significantly higher than the Rs 15.57 crore previously ordered in 2019. OPG also faces a six-month ban in addition to a five-year debarment.
Despite recognizing that NSE lacked a policy for the colo facility and failed to monitor the secondary server, Sebi found no evidence of collusion with OPG. The issue originated when OPG Securities exploited the tick-by-tick (TBT) data feed mechanism from June 2010 to March 2014, obtaining quicker access to trading data.
The colocation facility, launched in 2009, allows brokers to place their IT servers within NSE’s premises for faster access to stock information. The case came to light after whistleblower Ken Fong’s complaints in 2015, leading to multiple probes by Sebi.
In January 2023, the Securities Appellate Tribunal (SAT) set aside Sebi’s 2019 order requiring NSE to disgorge Rs 625 crore but directed NSE to deposit Rs 100 crore for lack of due diligence. Sebi has since refunded Rs 300 crore to NSE following Supreme Court orders.
First Published: Sep 13, 2024 | 8:31 PM IST
Original Story https://www.business-standard.com/markets/news/sebi-disposes-of-proceedings-against-nse-ex-officials-in-co-location-case-124091301348_1.html
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