Markets

Limaye takes over as NSE chief, insists he will get to the bottom of co-location issue

Palak Shah Mumbai | Updated on January 11, 2018

Vikram Limaye, Managing Director and CEO, NSE   -  PTI

To launch IPO once algo-trading imbroglio is resolved

Vikram Limaye, the new Managing Director and CEO of the National Stock Exchange (NSE), who took charge on Monday, said he would get to the bottom of the co-location issue, engage in active dialogue with SEBI to resolve it, and then move to launch the exchange’s IPO.

In his address to NSE employees, Limaye advised them to leave legacy issues behind and focus on the future.

The NSE has been fighting allegations of giving preferential access to brokers at its co-location facility, used for algorithmic trading. The allegations were first levelled by a whistle-blower in 2015 but were never acknowledged by the bourse until an inquiry was ordered by SEBI in 2016.

The exchange is also in a tight spot after it faced a three-hour shutdown of its trading systems this month due to a “technical glitch”.

‘Get a handle on the crisis’

“Siemens, Toyota, Arthur Andersen, Wells Fargo and many more such top-quality international institutions have undergone a difficult phase but only those who acknowledged the problem and worked towards resolving it survived. Some of these organisations have handled crises better than others,” said Limaye.

Asked how he would handle the exchange, Limaye said: “The crux lies in providing high-quality technology and risk management. These are the two most important elements for a successful exchange.”

According to Limaye, there are many parallels with regard to the timing of his joining IDFC and NSE. “There was a management void when I joined IDFC in 2005. Its previous CEO had to go due to issues with the government. IDFC had to be taken public within six months of my joining. Likewise in the NSE, we have to fill a management void and take the company public after resolving the co-location issue.”

Limaye added: “Technology at the NSE has been the differentiator for nearly 23 years ... Problems like technical glitches are common even for some global exchanges. What is required is to get to the bottom of the issue and resolve it.”

The new NSE chief is clear that he would approach SEBI for a settlement of the co-location issue under consent terms and move to launch the IPO once the issue is settled.

Published on July 17, 2017

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