SEBI’s final order in the NSE co-location scam expected soon

Mumbai | Updated on March 28, 2019

Regulator may close the issue with a ‘penalty’, a source told BusinessLine

SEBI’s final verdict in the preferential access scandal involving the NSE co-location servers is expected in a fortnight, sources close to the developments told BusinessLine.

This month, the regulator concluded its hearing of the parties involved, cross-examination and inspection of documents. Work on the final order is now on, the sources said. The hearing in the matter started in December 2018.

SEBI has deliberated over data or information sharing by the exchange with certain entities and the verdict may have a special mention of the issue, the sources said. The preferential-access scandal involved various aspects including first login to co-location servers by certain brokers, use of dark fibre cable network and sharing of data and information without adequate monitoring and rules of its end use.

SEBI had detailed in its show-cause notice (SCN) as to how a how Delhi-based broker OPG Securities got preferential access to trading systems, and managed to dictate terms at the exchange. The SCNs also highlighted how another firm, Sampark Infotainment, which later handed over its infrastructure at the NSE to RCom, allegedly manipulated the ‘Dark Fiber’ connectivity at the NSE.

Another source involved with the hearing said SEBI may close the case with a monetary penalty against the entities it had issued SCNs. SEBI did not comment on an email query from BusinessLine.

Published on March 28, 2019

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