The market regulator has imposed a penalty of Rs 1 crore on the National Stock Exchange and Rs 25 lakh each on Ravi Narain and Chitra Ramakrishna in relation to its ongoing investigation in the co-location case. The three parties have been directed to deposit the penalty within 45 days.
The Securities and Exchange Board of India said in its order that all findings in its probe lead to the conclusion that NSE failed to comply with the Stock Exchange and Clearing Corporation Regulations. Further Ravi Narain and Chitra Ramakrishna—the exchange's former managing director and chief executive officer, respectively—are vicariously liable for acts committed by the stock exchange, the regulator said.
The case emanates from complaints received by SEBI in 2015 which alleged that a trading member—OPG Securities—used the NSE's system to its advantage by having an arrangement with the NSE's staff. That, according to the complaints, helped OPG Securities gain preferential access to NSE's backup servers.
This order is part of a multi-pronged investigation initiated by the SEBI against the bourse. The market regulator had earlier imposed a fine of Rs 90 crore on the NSE in May 2019. It also let off three employees of the stock exchange and directed initiation of enquiry against two individuals last year in the dark fibre case.
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