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NSE to Seek Sebi Nod to Resolve Co-location Case

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Exchange MD Limaye also says it’s working on structure to allow GIFT City trading
The National Stock Exchange will soon approach market regulator Sebi to seek resolution of its co-location case through the consent mechanism and is also working on a structure to address its issues with Singapore Exchange, NSE chief executive Vikram Limaye said. “We will talk to Sebi and come out with a resolution on the co-location case and see if we can apply for the consent mechanism,” Limaye told ET on the sidelines of an event to unveil NSE’s new logo on Wednesday. The Central Bureau of Investigation (CBI) had earlier this year registered an FIR against a stock broker who allegedly manipulated NSE’s system from its co-location facility for two years to get first access to markets when they opened. Sebi has in the past returned NSE’s consent application as it had not completed investigation in the case.
The regulator has issued two showcause notices to the exchange and some of its key former and current officials. One of them allege that they gave preferential access to a few highfrequency traders and brokers to its trading platform. The second notice issued last month alleged connivance between NSE officials and brokers who have been accused of misusing the co-location facility.
Limaye also said NSE is in talks with Singapore Exchange (SGX) to resolve a dispute on SGX Nifty. “We are in the process of figuring out a structure, wherein investors can trade in GIFT City (Gujarat International Finance Tec-City) through SGX,” he said. “We need regulatory input for the proposed structure. The new structure will be in the interest of everyone, regulators, participants, SGX and India.” Last month, SGX and NSE in a joint statement said they have deferred the ongoing arbitration proceedings pending outcome of their talks, and that they had resumed discussions on a potential collaboration in GIFT City.
This was after Sebi held talks with its counterpart Monetary Authority of Singapore on July 24 to discuss an amicable resolution of the NSE-SGX tussle among other things. NSE and SGX have been locked in dispute after the Indian exchange announced in February that it would stop licensing its indices to its foreign counterpart from August. NSE’s Nifty futures and options, which are traded in the island nation, are popular with foreign investors who are not keen on trading in India. In response to that, SGX said it would launch successor products to its flagship Indian equity derivative products on June 4. On June 14, arbitrator allowed Singapore Exchange to continue listing and trading of SGX Nifty contracts beyond August.
The Economic Times, 09th August 2018

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