The Securities and Exchange Board of India said on Friday that the National Stock Exchange has settled a case involving alleged violations in trading access point or TAP architecture by paying a settlement amount of Rs 643 crore.
The settlement amount was paid by the NSE on behalf of itself and other settlement applicants, including its former chief executive officer Vikram Limaye, on Sept. 25, SEBI said.
The market regulator had earlier charged NSE of violating its security norms by failing to take remedial measures to prevent a potential bypass of its TAP architecture.
In 2023, SEBI had issued a show cause to NSE and Limaye in connection to the case. While proceedings in the case were pending, the applicants filed for settlement "without admitting or denying the findings of facts and conclusions of law", the regulator said.
NSE proposed the settlement terms after holding four meetings with the SEBI's internal committee between November 2023 and February 2024, it said.
The settlement terms were placed before the SEBI's high-powered advisory committee, which asked the internal panel to re-examine the amount. This was followed by NSE submitting revised settlement terms on June 14, SEBI noted.
Notably, TAP was a software application deployed by NSE in 2008 on the servers of trading members for managing connections and orders. The trading members, registered with the exchange, connected to TAP to establish communication with the NSE trading system.
While NSE introduced ‘Trimmed TAP' in December 2013 and ‘Direct Connect' in February 2016 as an alternative to TAP, it continued with TAP till September 2019 in the equity segment and till November 2020 in the securities lending and borrowing segment.
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