Securities Appellate Tribunal stays NSE fine in unfair access case
Reuters May 22, 2019
India's National Stock Exchange (NSE) won a partial reprieve on a $90 million regulatory fine for allegedly giving unfair access to its network servers, as an appellate tribunal on Wednesday announced an interim hold on the penalty.
However, a two-judge panel of the Securities Appellate Tribunal asked the NSE to transfer the $90 million to an account managed by the Securities and Exchange Board of India (SEBI), where it will remain untouched until the outcome of the case.
SEBI last month fined the NSE and imposed public fundraising restrictions on the bourse for six months, after finding that the country's largest stock exchange had failed to ensure equal access for all brokers to its network servers.
The NSE would still have to comply with those fundraising restrictions, the tribunal said on Wednesday during the bourse's appeal against SEBI's order.
The bourse would voluntarily pause efforts on a public listing for at least six months, a lawyer for the NSE told the tribunal.
The NSE had planned an initial public offering in 2017 but it has been delayed due to the SEBI's three-year-long probe.
The markets regulator had been investigating allegations that NSE officials had provided some high frequency traders unfair access through co-location servers placed at the site of the exchange, which could aid high-speed trading.
SEBI has said it had insufficient evidence that the NSE had engaged in fraudulent and unfair trade practices, but it had established the exchange did not exercise due diligence when putting in place the co-location servers.
The tribunal has given the SEBI six weeks to respond to the NSE's appeal. The next hearing is on July 22.