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NSE to pay Rs1,000cr in co-location case: SEBI order

Market regulator Securities and Exchange Board of India (SEBI) on Tuesday has barred the National Stock Exchange (NSE), which has the largest market share in equity segment and almost a monopoly in equity derivatives, from accessing the securities market for six months, according to the media reports.

The media report said that the capital markets regulator has ordered the exchange to disgorge around Rs1,000cr — that is, Rs624.89cr plus 12% interest from April 01, 2014 — for its alleged failure to exercise proper due diligence while offering co-location facility thereby affecting market fairness and integrity.

The regulator has also barred the exchange from the securities market for six months. This means the NSE cannot access the capital market in terms of IPO for six months, the media report added.

The National Stock Exchange (NSE) did not exercise due diligence while putting in place TBT (Tick-by-Tick) architecture, SEBI said in its order.

Further, the media added that the SEBI said the disgorged amount has to be deposited in the Investor Protection and Education Fund within 45 days.

SEBI found former NSE managing directors Ravi Narain and Chitra Ramkrishna guilty in the case and prohibited both from associating with listed company/market infrastructure for three years. Also, Narain has to give away 25% of his salary drawn for the period FY11 to FY13 and Ramkrishna 25% of FY14 salary to the investor protection fund, the report stated.

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