MUMBAI: The Securities and Exchange Board of India has initiated an 'enforcement action' against National Stock Exchange and some of the individuals involved in the co-location case.
"The investigating authority conducting the probe has submitted its report. We have initiated enforcement action against the institution and individuals
and in the next few days we will complete the enforcement action against various entities which are involved,"Sebi chairman Ajay Tyagi told reporters after the Sebi board meeting.
Last year in May,Sebi had set up an investigating authority to look at the alleged connivance between NSE employees and brokers who have been accused of misusing the co-location facility.
The regulator had also engaged forensic experts to aid in its investigation in the NSE case.
Sebi had earlier issued show-cause notices to the exchange and its 14 officials — both former and existing — asking them to explain alleged irregularities in the functioning of the co-location system.
The regulator alleged that NSE gave preferential access to a few high-frequency traders and brokers to its trading platform.
NSE and most of its current and former executives had opted to settle the co-location case through consent mechanism with Sebi. However, in March Sebi returned the consent applications of NSE and its top officials.
The case dates back to 2015, when a whistleblower wrote a letter to Sebi alleging that NSE gave preferential access to a few high-frequency traders and brokers to the exchanges' trading platform.
Last month,Central Bureau of Investigation has filed a case against stock broker Sanjay Gupta, owner of OPG Securities, and unidentified officials at market regulator Sebi and the National Stock Exchange for their alleged role in manipulating the bourses systems that gave Gupta trading access a few seconds ahead of other dealers.
The agency also booked Guptas brother-in-law Aman Kokrady, and Ajay Shah, a professor at the National Institute of Public Finance and Policy in the case. On CBI's allegations against Sebi officers,Tyagi said:"If CBI has some information on any Sebi officer, it is for them to take action as per law."