SEBI Drops Charges Against NSE and Former Executives in Co-Location Controversy

The Securities and Exchange Board of India (SEBI) has concluded its proceedings against the National Stock Exchange (NSE), along with former officials Ravi Narain, Chitra Ramkrishna, Anand Subramanian, and others, in connection with the exchange’s co-location services investigation.

Ravi Narain served as the Managing Director and CEO of NSE from 2000 to March 2013, while Chitra Ramkrishna held the same positions from April 2013 to December 2016. Anand Subramanian was the Chief Strategic Officer from April 2013 to March 2014. This order effectively ends the regulatory scrutiny against these individuals and the exchange itself.

The proceedings were initiated following an order from the Securities Appellate Tribunal (SAT), which reviewed appeals filed by NSE, its employees, broker OPG Securities, and others. In an order issued on September 13, SEBI noted, “It is undisputed that NSE lacked a detailed policy governing the use of the co-location facility and failed to monitor the usage of the secondary server by trading members without adequate justification. The explanation provided by NSE regarding the ‘registration enablement mail’ sent during the co-location facility setup cannot be considered sufficient in fulfilling its regulatory responsibilities.”

NSE has declined to comment on the matter.

SEBI thoroughly evaluated whether there was any collusion between the exchange, its officials, OPG Securities, and its directors. After considering the evidence and various observations, the order stated, “It strongly appears that there was no collusion or connivance by the parties involved, and the allegations of fraud made in the 2023 show-cause notice lack substantial justification.”

The order further acknowledged that while collusion might not always leave a documented trail or evidence of monetary transactions through official channels, the reports from external consultants like Deloitte, EY, and ISB did not conclusively establish any illicit coordination between the exchange, its officials, and the brokerage.

Source:- Moneycontrol