NSE board to challenge SEBI orders in colocation case in SAT

The board of the National Stock Exchange (NSE) plans to challenge the recent SEBI orders penalising the bourse in the co-location, dark fibre and corporate governance cases. The NSE will be moving the Securities Appellate Tribunal (SAT), according to an audit report filing by the bourse. SEBI has asked the NSE to disgorge Rs 624.890000000 along with 12% interest, and barred the exchange from accessing the capital market for six months, in the co-location case. In the dark fibre case, NSE has been fined Rs 62.580000000 along with 12% interest, and in the corporate governance case relating to misuse of confidential trading data, NSE has been directed to take remedial measures. The decision to challenge the SEBI orders were discussed at the NSE’s board meet on May 17. NSE feels it has strong grounds to contest the SEBI orders, including the monetary penalties. In the co-location case, SEBI ruled that NSE had failed in its duty to offer a level playing field for brokers who had subscribed to the exchange’s tick-by-tick (TBT) data feed. The flaw in the TBT architecture resulted in some brokers getting the price feed information head of others. In the dark fibre case, SEBI held the exchange as well as some NSE officials guilty of preferential treatment to some brokers, who were able to access both BSE and NSE colocation price feeds simultaneously. In the corporate governance case, SEBI held NSE and its former MD and CEOs Ravi Narain and Chitra Ramakrishna guilty of negligence and of ignoring the conflict-of-interest factor while passing on confidential data to Infotech Financial Services. NSE officials and brokers who have been penalised by SEBI had approached the SAT and managed to get an interim stay.