The Securities and Exchange Board of India (Sebi) rejected a settlement application by the National Stock Exchange (NSE) in the colocation case that pertains to a scam in which brokers were accused of getting preferential treatment from the NSE.
The regulator rejected NSE’s consent plea in which the latter sought to settle the violation by paying a fee and without admitting or denying guilt, Moneycontrol reported. Sebi said it will pass a regulatory order against NSE.
The case in question pertains to OPG Securities and the key accusations against the broker include the alleged collusion between NSE and Delhi-based broker OPG Securities. The broker is accused of logging in to Tick by Tick Data Feed (TBT) ahead of others.
NSE is also accused of failing to have in place a mechanism that would have ensured more transparent access to market participants, reducing the advantage OPG Securities had over others.
The market regulator passed a series of orders in the matter in 2019, which were challenged by the NSE and the broker in the Securities Appellate Tribunal (SAT). Promoter of OPG Securities Sanjay Gupta was arrested by the CBI in 2022 in connection with the case.
The case was back with Sebi when SAT asked the regulator to consider the charge again.
“After rejecting the consent plea, Sebi has gone ahead with the procedure. Last week, Sebi provided a chance of personal hearing to NSE in the matter and is expected to pass an order in the matter soon,” Moneycontrol quoted a source as saying.
“The question of law is whether NSE employees were working with OPG or is it a general failure on erstwhile exchange officials to take decisive action against OPG. Connivance charge needs higher evidence like documents showing flow of money between the parties or material suggesting some NSE officials tampered the system to favour OPG," Moneycontrol quoted another source as saying.
