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Securities Appellate Tribunal Rejects NSE Plea Allowing It To Provide A Bank Guarantee To SEBI In The Co-Location Case
[ By Bobby Anthony ]A National Stock Exchange (NSE) plea to allow it to provide a bank guarantee instead of transferring Rs 687 crore from an escrow account to the Securities and Exchange Board of India (SEBI) in the co-location case was rejected by the Securities Appellate Tribunal (SAT) recently.However, the NSE was given an additional week to comply with the order, which had directed it...
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A National Stock Exchange (NSE) plea to allow it to provide a bank guarantee instead of transferring Rs 687 crore from an escrow account to the Securities and Exchange Board of India (SEBI) in the co-location case was rejected by the Securities Appellate Tribunal (SAT) recently.
However, the NSE was given an additional week to comply with the order, which had directed it to transfer Rs 687 crore to SEBI, within two weeks from an escrow account.
Earlier, SEBI had asked the NSE to deposit revenue from its co-location facility in an escrow amount as an interim measure, but NSE moved SAT challenging SEBI’s ruling.
The matter pertains to SEBI’s direction to NSE to disgorge profits of over Rs 1,000 crore. The amount included disgorgement of the Rs 687-crore profit derived from dissemination of data in the co-location case.
Additionally, SEBI had also imposed a six-month ban on the NSE from launching new derivative products besides action against other entities, including some current and former officials, after their roles in the co-location case were revealed.
Based on reasonable grounds, SAT had ordered the NSE to initiate a probe against its own staffers in order to find out if they had given any “preferential treatment” in terms of access to market data, to certain brokers.
In a related development, SEBI recently directed NSE’s former managing director and chief executive officer Chitra Ramkrishna to disgorge a fourth of her salary for FY2013-14. She was at the helm of NSE when NSE’s co-location trading systems were allegedly misused by certain brokers to gain unfair access.
SEBI had passed similar directives against Ramkrishna’s predecessor Ravi Narain as well. Later, both of them had approached SAT seeking relief.