Active Stocks
Thu Mar 28 2024 15:59:33
  1. Tata Steel share price
  2. 155.90 2.00%
  1. ICICI Bank share price
  2. 1,095.75 1.08%
  1. HDFC Bank share price
  2. 1,448.20 0.52%
  1. ITC share price
  2. 428.55 0.13%
  1. Power Grid Corporation Of India share price
  2. 277.05 2.21%
Business News/ Market / Stock-market-news/  NSE sends suspension notice to OPG Securities on unfair access issue
BackBack

NSE sends suspension notice to OPG Securities on unfair access issue

NSE has sent a suspension notice to OPG Securities, which had allegedly got unfair access to NSE trading systems by logging in via secondary servers

NSE started disciplinary proceedings against OPG in February. Photo: MintPremium
NSE started disciplinary proceedings against OPG in February. Photo: Mint

Mumbai: The National Stock Exchange of India (NSE) has sent a suspension notice to OPG Securities Pvt. Ltd, which had allegedly got unfair access to NSE trading systems.

The firm has 21 days to respond to the notice following which OPG will stand suspended, an NSE spokesperson said on Tuesday.

“OPG Securities will be suspended for six months as trading member of all segments of this exchange with immediate effect after observance of necessary formalities and any other prescribed procedural requirements. Communication to this effect has been issued to the member," NSE said in an emailed statement.

The suspension period would be from 29 September to 28 March 2018.

Sanjay Gupta, chief executive of OPG Securities, declined to comment.

The suspension notice was issued after NSE established that OPG was found to be in violation of exchange by-laws and that despite repeated warnings OPG continued to log-in via secondary servers.

NSE started disciplinary proceedings against OPG in February after a forensic audit of NSE systems by Deloitte established that OPG had unfair access to NSE systems.

According to the Securities and Exchange Board of India (Sebi) show cause notice to NSE on 22 May, the allegation against brokerage OPG Securities is that it kept logging onto NSE systems first via the less crowded secondary servers while other brokers and traders were using the primary servers.

This was brought to the notice of mid-level management of NSE and in spite of repeated warnings, OPG continued to log on to secondary servers, gaining an advantage over the rest.

Co-location is a facility which allows housing of traders’ servers at the exchange premises. This allows faster access to data feeds and price information released by exchanges. Algorithmic trading or high-frequency trading (HFT) refers to the use of electronic systems which can potentially execute thousands of orders on the stock exchange in less than a second.

The allegations of unfair access pertain to 2012-14, when NSE used to disseminate price information through a unicast system, where information is disseminated to one member after another.

In the first half of 2014, NSE shifted to a broadcast system, where price information was broadcasted to all members at the same time.

OPG profited from it and when NSE changed its systems, the profits of OPG fell sharply. Profit rose to Rs11 crore in 2013-14, the period to which the allegations pertain, from Rs1.36 crore in 2012-13, but went down sharply to about a crore in 2014-15.

Unlock a world of Benefits! From insightful newsletters to real-time stock tracking, breaking news and a personalized newsfeed – it's all here, just a click away! Login Now!

ABOUT THE AUTHOR
Jayshree P Upadhyay
Jayshree heads a team of reporters focussing on legal, regulatory, investigative stories. She has worked for over a decade, reporting on financial scams, legal stories and the intersection of corporate and regulatory issues. She is based in Mumbai and has previously worked with Business Standard, Mint, The Morning Context and Bloomberg TV India.
Catch all the Business News, Market News, Breaking News Events and Latest News Updates on Live Mint. Download The Mint News App to get Daily Market Updates.
More Less
Published: 05 Sep 2017, 05:28 PM IST
Next Story footLogo
Recommended For You
Switch to the Mint app for fast and personalized news - Get App