New Delhi: Market regulator Sebi has directed the National Stock Exchange to disgorge more than Rs 625 crore of profits derived from dissemination of data in the co-location case and barred two former chiefs of the bourse for five years from being associated with market intermediaries.
Ravi Narain and Chitra Ramkrishna — who had served as MD and CEO of the exchange — have been asked to disgorge 25 per cent of respective salaries drawn during a certain period.
They have also been prohibited from “associating with a listed company or a market infrastructure institution or any other market intermediary for a period of five years,” Sebi said in a 104-page order. According to the order, the exchange has also been prohibited from accessing the securities market directly or indirectly for six months.
The bourse should also carry out system audit at frequent intervals after thorough appraisal of the technological changes introduced from time to time. Further, the exchange has to reconstitute its Standing Committee on Technology at regular intervals to take stock of technological issues and frame a clear policy on administering whistle-blower complaints, as per the order.
Alleged lapses in high-frequency trading offered through NSE’s co-location facility came under the scanner of the watchdog after a complaint was filed in 2015. The bourse “shall disgorge an amount of Rs 624.89 crore… along with interest calculated at the rate of 12 per cent per annum from April 1, 2014, onwards to the Investor Protection and Education Fund (IPEF) created by Sebi”, the order said.
Show-cause notices were issued to the exchange and 16 individuals. Out of them, the regulator has let off 14 individuals, including senior exchange official Ravi Varanasi. Passing the order in the high profile co-location case, the watchdog said the exchange did not exercise requisite due diligence with respect to Tick-by-Tick (TBT) data architecture.