In a bid to ascertain the facts behind allegations against the NSE in the matter related to its co-location facility, SEBI has now formed its own internal team of core officials to look into the evidence collected by other agencies. This is the first time since allegations were levelled against NSE in 2015 that SEBI has decided to set up its own investigation team.

According to sources close to the investigations, the SEBI officials will go into all the evidence collected so far, including digital footprints, reports from experts and forensic investigators, to unravel the truth behind the alleged scam. NSE itself has denied any wrongdoing.

The sources also said in December, SEBI officials visited NSE premises and offices of several stockbroking entities to take over or copy data in digital devices and computer hard disks.

SEBI's probe team comprises officials at the level of chief general manager and above from market regulations and other department. “Through this 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,” the source said.

Separately, it is learnt that the regulator is also looking into 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 and Enforcement Directorate. Prima facie, there are two questions that SEBI is looking at -- the first, if there is any case of systemic lapse and the second as to who colluded and benefited from it.

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

“Even if SEBI has to decide on the fate of consent applications filled by NSE employees, the regulator has to first complete its investigations into the matter. So far, all investigations into the matter have been conducted by external agencies or experts, but a core team of SEBI officials is looking into it only now,” said another source. NSE declined to comment on the matter and an email sent to SEBI remained unanswered.

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