The National Stock Exchange of India (NSE) has revealed that the market regulator has rejected its request to resolve a matter related to alleged irregularities in its colocation (colo) facilities.
The exchange had filed the settlement application in response to a show-cause notice issued by the Securities and Exchange Board of India (Sebi) in May 2023. The exchange had also filed a detailed response to the notice in August 2023.
‘Sebi vide its letter dated December 18, 2023, has rejected the settlement application filed by NSE. “The personal hearing in the matter concluded on February 2, 2024 and Sebi’s order in this regard is awaited,” the NSE said in a statement.
In January 2023, the Securities Appellate Tribunal (SAT) had set aside a reinstatement order by the market regulator against NSE in the Colo matter.
It had, however, allowed an investigation into the charge of connivance and collusion by OPG Securities with the employees and officials of NSE. The conciliation request refers to this issue.
In 2019, Sebi had ordered NSE to return Rs 625 crore for the alleged violations. Quashing the order, the SAT had directed NSE to deposit Rs 100 crore for lack of due diligence.
The market regulator refunded Rs 300 crore to the exchange following the directions of the Supreme Court in the same case.
According to legal and market experts, NSE needs to resolve its pending litigation before it can go ahead with its much-awaited initial public offering (IPO).
In December 2023, SAT quashed a Sebi order against NSE and former top bosses Chitra Ramkrishna and Anand Subramanian in the so-called “dark fiber” case, where certain brokers allegedly exploited the exchange’s internet infrastructure to gain faster connectivity. to the colo facilities. The court also reduced the sentences imposed on Ramkrishna and Subramanian.
NSE revealed that proceedings on Sebi orders related to governance and conflict of interest matters are pending final hearing before the SAT.
Among other cases, preferential access to tick-by-tick data at colo facilities is pending before the Supreme Court. Sebi had filed an appeal against the SAT order, which quashed the Rs 1 crore fine on NSE.
The January 2023 SAT order is also pending appeal to the Supreme Court.
Additionally, NSE had also filed a settlement request in a matter related to alleged misuse of commercial access point (TAP) software for which an update is awaited.
First published: February 13, 2024 | 6:06 p.m. IS