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The capital market regulator SEBI said all participants who avail themselves co-location or proximity hosting facility should have fair, transparent and equal access to facilities and data feeds provided by the stock exchange experiencing similar latency.
Latency is the time taken in seconds/milli seconds/micro seconds for the data to be transmitted from the exchange servers to the servers to the dealer terminals via the servers of stock brokers/data vendors. Lower the latency, higher the speed of transmission.
Exchanges have been directed to have sufficient hosting space to accommodate all the stock brokers and data vendors desirous of availing the facility besides the flexibility of rack space according to the needs of brokers/data vendors.
In addition, exchanges have to say yes or no to applicants for co-location along with reasons for rejection within 15 days of receiving the application, besides facilitating receipt of data feeds from/ allow order routing to other exchanges at the co-location facility.
Details regarding co-location and proximity hosting, requirements for brokers/data vendors, terms and conditions, fees and charges have to be put up by exchanges on their websites.
Exchanges have to put in place systems to implement these guidelines in three months, inform stock brokers, disseminate the circular on their web sites, amend by-laws and report implementation status to SEBI.
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