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The National Stock Exchange (NSE), former Managing Director and CEO Vikram Limaye, and eight others have settled the trading access point (TAP) misuse case by agreeing to pay a settlement amount of Rs 643 crore.
In the TAP case, the market regulator had issued a show cause notice to the stock exchange in February 2023 following its findings that there was a possibility of circumvention of the system by brokers and that NSE had failed to take appropriate appropriate corrective measures.
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TAP refers to a software application deployed by NSE and used by stock brokers to establish communication (orders/transactions) with its trading system. It was launched in 2008 and continued until September 2019 for the equity segment. The exchange had introduced “Direct Connect” as an alternative to TAP in 2016.
The exchange had filed a settlement application with the regulator first in 2023 and then a revised application in August 2024.
Under the standards for settlement procedures, matters can be resolved without admitting or denying the regulator’s findings. The settlement amount is determined by a high-level advisory committee (HPAC) and subsequently approved by a panel of whole-time members (WTM) of Sebi.
“The WTM panel accepted the recommendations of the HPAC to settle the issue of composite payment by NSE to the tune of Rs 643 crore,” the settlement order said.
In the order, Sebi whole-time member Ashwani Bhatia also directed the former officers to carry out voluntary community works of at least 14 days during the current financial year.
Resolving key legal proceedings will help NSE move forward with its much-anticipated initial public offering (IPO). The exchange has also applied for a no-objection certificate (NOC) from Sebi for approval for filing of IPO documents.
Last month, Sebi dropped charges against NSE and its seven former executives, including Chitra Ramkrishna, Ravi Narain and Anand Subramanian, in the co-location case, citing lack of evidence to substantiate the allegations.
In his order, Sebi whole-time member Kamlesh Varshney noted that while there were certain lapses in NSE’s colo facilities, there was no evidence to establish any ‘collusion’ or ‘connivance’. with stockbroker OPG Securities, which had been granted “unfair” access. to the exchange’s secondary server.
First publication: October 4, 2024 | 6:31 p.m. STI