NSE algo trading case: SEBI may ready final report by May 15

PALAK SHAH Mumbai | Updated on May 09, 2018

Regulator has been trying to find out the exact role of each NSE employee

A final report of the investigation done by SEBI on the alleged algo and unfair access-related case of the NSE is likely to be ready by May 15. The report may also suggest enforcement action that the regulator needs to take against those involved in the alleged manipulation, sources close to SEBI told BusinessLine.

SEBI’s Technical Advisory Committee (TAC) in 2016 had said in its report that, “Preferential access was given by the NSE to stockbroker(s), wherein it was possible for a stockbroker to log into multiple dissemination servers through multiple Internet protocols assigned to them.” The NSE has consistently dismissed the allegations. In September 2016, at a SEBI meeting, the entire TAC report was read out to key members of the NSE board. Following this meeting, some top level executives quit the NSE.

Through the ongoing probe, SEBI is trying to find out the exact role or possible collusion of each of the NSE employees who were show-caused by it earlier or even others who could be linked to the matter. Thirteen NSE officials were show-caused by SEBI.

Prima facie there are two questions that SEBI has looked at — first, if there is any case of systemic lapse, and the second, who colluded and benefited from it. While systemic lapse was established by previous probes, including the TAC, the final report will throw light on who mainly benefited from the manipulation.

SEBI has also studied the ownership pattern of companies linked to the NSE and even those holding a stake in it to find out if there is any credence to the allegation of a former Union Minister and his son having financial interest in the exchange, the source said. This probe depends mainly on documents and cues provided by the Income Tax Department and Enforcement Directorate.

Published on May 08, 2018

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