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The National Stock Exchange (NSE) has filed a fresh plea with SEBI to settle a regulatory probe into the misuse of its Trading Access Point (TAP) software with Revised Settlement Terms (RST)
Battle between NSE and SEBI
NSE introduced TAP software in FY14 to reduce latency but was later misused in the co-location scam
The co-location scam involved high-frequency traders exploiting NSE’s TAP software for unfair advantages, discovered by the Income Tax department in 2017.
NSE filed settlement applications with SEBI in 2022 and 2023, but SEBI returned them due to a pending investigation
On February 28, 2023, SEBI issued a show-cause notice to NSE regarding the co-location scam
NSE responded with a settlement application on March 5, 2023, agreeing to pay a fair sum but without admitting guilt or liability.
SEBI held multiple internal committee meetings with NSE to discuss the settlement.
NSE filed a Revised Settlement Terms (RST) with SEBI on March 5, 2023
SEBI’s High Powered Advisory Committee rejected the consolidated settlement offer on May 24, 2023, and directed NSE to submit individual applications.
NSE’s Board approved a revised submission, which was filed with SEBI on June 14, 2023, and is now awaiting SEBI’s response.
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