Sebi to show-cause NSE in co-location case

The Securities and Exchange Board of India (Sebi) will soon issue a show-cause notice to the National Stock Exchange (NSE) and some of its stakeholders in the co-location probe, ETNOW reported, quoting sources.

Two audit firms appointed by Sebi has conducted forensic audit on a section of brokers who had been allowed to use co-location facilities by NSE. The watchdog has been probing alleged lapses in high-frequency trading offered through NSE's co-location facility.

ETNOW said the show-cause notice may question NSE why penal action should not be taken against it for unfair practices. It will also highlight how the stock exchange gave undue favour to a set of brokers and how it failed to put the systems and processes in place to check the same.


Sebi will begin the adjudication process on NSE, brokers and others soon, Chairman Ajay Tyagi had told media after a board meeting on June 21. "We have received the NSE investigation report in the co-location case... we have completed the examination of the report and have initiated enforcement actions," Tyagi had said.

He said the market regulator had initiated enforcement actions against various entities in the case.