India securities tribunal gives relief to NSE in colocation case

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The Securities Appellate Tribunal (SAT) ordered the country’s largest exchange to pay a penalty of 1 billion rupees ($12.3 million) for the lapse in its systems, the lawyer representing NSE said in Mumbai.

The lawyers declined to be named as they were not allowed to speak to the media.

Officials at the NSE and SEBI did not immediately respond to Reuters’ request for comment.

In 2019, SEBI passed a series of orders against the NSE and its former chief executives, Chitra Ramkrishna and Ravi Narain, alleging that the exchange did not exercise due diligence in establishing a network that allowed traders of high frequency unfair access to some network. servers in the exchange.

SEBI ordered the NSE to deposit nearly 11 billion rupees, including interest, in an investor fund and barred it from raising money in the securities market directly or indirectly for six months.

She had also asked Narain and Ramkrishna to return 25% of the salaries they had received during the relevant period.

The Securities Appellate Tribunal on Monday ruled that SEBI’s disgorgement was unfair and that the exchange and its former officials did not enrich themselves.

“The disgorgement on NSE, Ramkrishna and Narain was set aside as SEBI failed to establish illegal gains,” said a lawyer representing SEBI in the tribunal.

SEBI had, in its order, said that it found the NSE systems at fault and gave preferential access to selected brokers when they accessed the high-speed algorithmic trading platform and its colocation facility.

The ban on Ramkrishna and Narain from the capital market has been reduced to a ban that has already taken place, the lawyer said.

Ramkrishna was arrested last March in the colocation case by the Central Bureau of Investigation.

($1 = 81.3525 Indian rupees)

(Reporting by Jayshree P Upadhyay; Editing by Dhanya Ann Thoppil)

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