SEBI disposes co-location case against NSE, seven ex-executives due to insufficient evidence

Ravi Narain served as the NSE's MD and CEO from 2000 until March 2013, Chitra Ramkrishna held the position from April 2013 to December 2016, and Anand Subramanian was the Chief Strategic Officer from April 2013 to March 2014.

The recent order effectively ends the proceedings against the exchange and its officials.

These proceedings were initiated following an order from the Securities Appellate Tribunal (SAT), which addressed appeals from the exchange, its employees, broker OPG Securities, and other parties.

In its order released on September 13, SEBI concluded that there is a strong possibility that neither the NSE nor its officials were involved in collusion or fraud with OPG Securities and its directors.

The order suggests that the allegations of collusion and fraud in the 2023 show-cause notice lack sufficient grounds.

The SEBI order acknowledged that while NSE did not have a well-defined policy for its co-location (Colo) facility and failed to adequately monitor the use of secondary servers by trading members, these shortcomings alone do not prove collusion with OPG Securities.

The order further stated that although NSE's lack of proper monitoring and guideline issuance demonstrated insufficient due diligence, this did not prove any collusion or connivance with OPG Securities and its directors.

The regulator thoroughly examined whether there was any collusion between the NSE, its officials, and OPG Securities.

Despite acknowledging that secret arrangements might not be easily detectable through audits or banking transactions, SEBI found no concrete evidence of collusion in the communications and records reviewed by external consultants like Deloitte, EY, and ISB.

In a separate order issued on September 13, the market regulator has directed OPG Securities and its associates—Sanjay Gupta, Sangeeta Gupta, and Om Prakash Gupta—to jointly and severally disgorge Rs 85.25 crore, plus interest at 12 percent per annum from May 22, 2015, until payment is made.

Additionally, Sanjay Gupta has been banned from the securities market for six months, on top of a five-year debarment imposed by a previous SEBI order in 2019.