Stocks

Co-location scam: SAT rejects NSE plea on bank guarantee

Our Bureau Mumbai | Updated on June 06, 2019 Published on June 06, 2019

The SAT on Thursday rejected a plea by the NSE for allowing it to provide a bank guarantee to SEBI in the co-location matter instead of transferring ₹687 crore according to the regulator’s order. The SAT only granted an additional week to the NSE to comply with the May 22 order which directed the exchange to transfer the money to SEBI’s escrow account within two weeks.

“In our view, we do not find any reason to modify our order dated May 22. The appellant (NSE) should transfer the amount which is already kept in the escrow account as per the interim order of SEBI,” SAT said while rejecting the NSE’s plea. Earlier, the regulator had asked the NSE to deposit revenue from its co-location facility in an escrow amount as an interim measure. Later, in its final order last month, SEBI directed the NSE to transfer the amount to the regulator’s escrow account. Last month, the NSE moved the tribunal challenging SEBI’s rulings against it in the co-location case.

The amount that the NSE will have to transfer includes disgorgment of ₹687 crore profit derived from dissemination of data in the co-location case. The tribunal also ordered the exchange to initiate an enquiry against its staff to find out if they had given any preferential treatment in terms of access to market data to certain brokers.

In the co-location case, the regulator had barred the exchange from accessing the securities market for six months.

Published on June 06, 2019
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