Context: Capital market regulator Securities and Exchange Board of India (SEBI) imposed a penalty of Rs 1 crore on the National Stock Exchange (NSE), and Rs 25 lakh each on Chitra Ramakrishna and Ravi Narain, the former managing director and vice-chairman of the exchange respectively, in connection with its three-year investigation in the co-location case.

What is the National Stock Exchange (NSE) co-location case?

• The NSE is facing allegations that some brokers got preferential access through the co-location facility at the stock exchange, early login, and ‘dark fiber’, which can allow a trader a split-second faster access to the data feed of an exchange.
• A whistleblower wrote to SEBI alleging that a few brokers were able to log into the NSE systems with better hardware specifications while engaged in algorithmic trading, which allowed them unfair access and advantage.
• The whistleblower’s letter to SEBI alleged that sophisticated market manipulation has been taking place for several years at the NSE co-location centre.
• It also said that NSE had allowed non-empanelled Internet Service Providers (ISP) to lay fibre cables on its premises for few stock brokers.

https://indianexpress.com/article/explained/nse-co-location-case-investigation-sebi-explained-7183593/

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