Markets

Sebi wants to quickly resolve NSE’s co-location row: Tyagi

Terming the ongoing NSE co- location issue as a "complex case", Sebi chairman Ajay Tyagi today said the regulator is on the job and is working on to resolve the matter "as quickly as possible".

"We want to come to a definitive conclusion as quickly as possible. The case is quite complex and technical and has involves various aspects. Since we've not concluded the probe, it would be improper for me to share where we are on the probe. But we are on the job," Tyagi told reporters after the Sebi board meeting here today.

The case relates to some brokers allegedly getting preferential access to the NSE servers through co-location facility between 2011 and 2014. The exchange discontinued the facility since 2014.

The issue took a different turn recently with the Income Tax sleuths conducting raids on some NSE brokers. On this, Tyagi said the regulator would follow its own regulations and take a view.

The controversy has delayed the public issue plan of the country's largest exchange that controls almost three- fourths of the market volume and the new chief executive Vikram Limaye was clear in stating that his priority was to get the co-location issue sorted out and that the public float plan should wait till then.

A Sebi probe is also underway to quantify the unlawful gains made by brokers allegedly in connivance with some top NSE officials.

The NSE has also submitted a forensic audit report on the issue, prepared by consultancy EY, to Sebi for a review.

Besides, the exchange has also submitted to Sebi the report of probe carried out by ISB Hyderabad to determine whether certain some brokers had made any abnormal profit as a result of getting preferential access to the NSE servers with the co-location facility.

The ISB was roped into verify whether the brokers named by the Deloitte forensic report had indeed profiteered through the facility.

Meanwhile, when asked whether Sebi will allow mutual funds to participate in commodity derivatives, Tyagi said, "we are looking at it and will take a view after the feedback from them." It can be noted that Sebi today allowed stock exchanges to offer commodity derivatives.

On algo trading, he said while such technology can't be stopped, Sebi is working on norms to better regulate it.

About the ongoing Sebi probe into shell companies, Tyagi said, "Sebi can only take action against shell companies as per the laws only."

He further said of the 331 companies that were listed by the corporate affairs ministry as shell companies, 49 went to SAT and 12 of them got stay on Sebi action while the rest were directed to go back to Sebi.

Of this lot, he said Sebi so far has heard 43 of them and passed orders in 34, of this, in 28 cases Sebi ordered forensic audits and six companies were freed of all restrictions.

On exemption sought by companies under the insolvency proceedings to report their loan defaults to exchanges, he admitted that this is a complex issue and there are many issues interplaying between the IBC and securities markets.

"We've a small group for this purpose. Earlier we had discussions with RBI and some banks. Now we have understood the issues and will take a final view on those. Maybe by March we will come out with the amendments required," Tyagi said.

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The post Sebi wants to quickly resolve NSE's co-location row: Tyagi appeared first on News Wire Now.

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