The Securities and Exchange Board of India (SEBI) has officially closed its case against the National Stock Exchange (NSE), along with former NSE executives Ravi Narain, Chitra Ramkrishna, Anand Subramanian, and others, concerning the exchange’s co-location services.
The market regulator SEBI has closed the long-running NSE co-location case without taking any action. SEBI decided to drop the case without issuing any directives, as there was not enough evidence of conspiracy or collusion.
This decision came after SEBI thoroughly reviewed a series of appeals and orders from the Securities Appellate Tribunal (SAT).
The case had been a hurdle for NSE’s IPO approval, but this decision has cleared the way. The matter began with SEBI’s order on April 30, 2019, which addressed NSE’s co-location facility. This facility allows trading members to place their servers in the exchange’s data center for faster access.
SEBI’s order was later challenged in an appeal before SAT, leading to SAT’s decision on January 23, 2023, which formed the basis of the recent proceedings.
In its January 2023 ruling, SAT reviewed several appeals, including those from NSE and individuals like Ravi Narain and Chitra Ramkrishna.
SAT’s decision highlighted a lack of evidence for systemic malpractice, although it pointed to human errors in IP allocation and system monitoring.
SAT found that while NSE’s system architecture provided fair and transparent data access, there were issues with IP allocation and server connection monitoring. Despite these shortcomings, SAT did not find any violation of market regulations.
SEBI’s recent review confirmed SAT’s findings, stating that no new evidence had emerged to support the allegations of collusion or conspiracy.
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