Just a couple of hours before releasing its order against the National Stock Exchange (NSE) in the co-location case Tuesday evening, the Securities and Exchange Board of India (Sebi) had told the exchange that it was rejecting its consent application -- a form of negotiated settlement of civil proceedings between the regulator and securities law offenders--it had filed to settle the case. The exchange had filed its consent application last year after Sebi alleged it gave preferential access to i ..
On Tuesday, the regulator directed NSE to pay over Rs 1,000 crore for favouring a few brokers to make illegal gains by using unauthorised trading software and networks in the same room where the exchange’s main trading servers were located.
Although the regulator passed a disgorgement order against NSE and its employees, it dropped allegations of fraudulent and unfair trade practices that it had levelled against them.
The principle of disgorgement is when a person or entity in the securities market makes a profit by fraudulent means. A disgorgement order is issued to repay those gains to affected investors with interest. Lawyers said NSE could challenge the extent of the disgorgement amount given that the exchange was not ..
Senior regulatory officials said disgorgement can also be used when there is violation of law and not just under FUTP (Fraudulent and Unfair Trade Practices).
Sebi in its order said NSE had violated its rules governing stock exchanges.
“Sebi has used it against intermediaries in the past but it is for the first time it has used it against a market infrastructure institution. Let the principle of disgorgement get tested in the court of law,” said a person familiar with the case. ..
On Tuesday, the regulator directed NSE to pay over Rs 1,000 crore for favouring a few brokers to make illegal gains by using unauthorised trading software and networks in the same room where the exchange’s main trading servers were located.
Although the regulator passed a disgorgement order against NSE and its employees, it dropped allegations of fraudulent and unfair trade practices that it had levelled against them.
The principle of disgorgement is when a person or entity in the securities market makes a profit by fraudulent means. A disgorgement order is issued to repay those gains to affected investors with interest. Lawyers said NSE could challenge the extent of the disgorgement amount given that the exchange was not ..
Senior regulatory officials said disgorgement can also be used when there is violation of law and not just under FUTP (Fraudulent and Unfair Trade Practices).
Sebi in its order said NSE had violated its rules governing stock exchanges.
“Sebi has used it against intermediaries in the past but it is for the first time it has used it against a market infrastructure institution. Let the principle of disgorgement get tested in the court of law,” said a person familiar with the case. ..
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