SEBI imposes ₹1 crore penalty on NSE in co-location case

The Securities and Exchange Board of India (SEBI) imposed a penalty of ₹ 1 crore on the National Stock Exchange (NSE) in the co-location case for failing to ensure a level playing field for trading members subscribing to its TBT (Tick-by-Tick) data feed system.

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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.

Even this infinitesimally sooner access is considered to result in huge gains for a trader.

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 unfair access issue pertains to 2012-14 when NSE used to disseminate price information through a unicast system. In such a system information is disseminated to one member after another.