In respite for NSE, SAT sets aside Sebi's co-location ruling

In a major relief for the National Stock Exchange, the Securities Appellate Tribunal (SAT) on Monday slashed to a sixth a 1624.89 crore fine imposed on India's largest bourse by the Securities and Exchange Board of India (Sebi) while setting aside the markets regulator's April 2019 order against the exchange in the co-location scam.

- Priyanka Gawande

The tribunal also overturned the regulator's orders against NSE's former top executives, Chitra Ramkrishna and Ravi Narain, while partially upholding Sebi's order against OPG Securities.

SAT directed NSE to pay *100 crore instead toward Sebi's investor protection and education fund for its lapses pertaining to the alleged co-location facility scam where certain brokers received preferential access to its secondary server at the expense of other trading members.

"Even though NSE has not indulged in any unethical act or has unjustly enriched itself, the direction to disgorge, in our opinion, cannot be sustained," SAT held. "Directions given by the Sebi's whole time member prohibiting NSE from accessing the securities market, directly or indirectly, for a period of six months and, further, directing NSE to carry out system audit at frequent intervals after a thorough appraisal of the technological changes introduced from time to time is affirmed." The SAT order was particularly critical of the regulator's conduct.