New Delhi: India’s leading bourse National Stock Exchange’s (NSE) board has accepted its vice-chairman Ravi Narain’s resignation and is looking to settle the co-location probe with markets regulator the Securities and Exchange Board of India (Sebi) through consent mechanism.
Narain, last week, had put in his papers amid Sebi intensifying its probe into alleged lapses in high-frequency trading offered through the exchange’s co-location facility. The role of some top officials, including Narain, who was also an ex-chief executive officer of the bourse, is also being looked into by Sebi.
People familiar with the development said Narain stepped down as vice-chairman to ensure that the process with Sebi on the co-location case should not get affected by his presence on the NSE board.
The board of directors of the company at its meeting held on Wednesday took note of the resignation of Narain as director and vice-chairman of the company with effect from 1 June 2017, NSE said in an a statement. Besides, the board placed on record its appreciation for the valuable contribution made by him to the exchange during his long presence on the bourse.
According to the people, NSE is looking to settle the ongoing co-location probe with Sebi under consent mechanism.
“NSE is in talks with lawyers and experts and also in touch with Sebi for settlement of the co-location probe with the regulator under consent mechanism. However, it has not filed any formal application with the regulator yet," the person said.
The consent mechanism allows settling pending proceedings without admission or denial of any wrongdoing in certain cases. The case relates to some brokers allegedly getting preferential access through co-location facility at the NSE, early login and dark fiber, which can allow a trader a split- second faster access to data feed of an exchange. Even a split-second faster access is considered to result in huge gains for a trader.
The probe is already said to be taking a toll on the exchange’s proposed initial public offering (IPO), for which it is awaiting Sebi’s clearance and was asked to provide clarifications. The people said that the NSE has submitted all the details sought by the regulator.