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NSE’s old and new hands decide to settle off court in co-location case

Published

8 years ago

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[vc_row][vc_column][vc_column_text]Driven into a corner for favouring some High Frequency Trading brokers, exchange has no option but to agree to SEBI diktat

~By Sujit Bhar

The National Stock Exchange (NSE) had retreated into its shell after a bout of aggressive behaviour when it had slapped a Rs 100 crore defamation suit on Moneywise Media Pvt Ltd, a fortnightly magazine that is published jointly by Debashis Basu and Sucheta Dalal. The suit, filed at the Bombay High Court by the NSE on July 21, 2015 was to stop the publication and circulation of an article which blew the whistle on an alleged illicit activity within the NSE, in which certain brokers were supposedly given an unfair advantage.

This happened in an area called the co-location facility, which is a favourably positioned area for systems which use a time differential of a fraction of a second to put in bids within a High Frequency Trading (HFT) environment. The time differential is in respect to computers of other brokers.

When the magazine placed its documents, the NSE had withdrawn their suit, but its troubles did not go away. It was also ordered to pay a fine of Rs 50 lakh, which it did. SEBI, meanwhile, had taken up the issue and had show-caused the exchange and many of its top officials. Now it has been revealed that the NSE has used some of its top current and former executives to drive a settlement through the consent mechanism available with the Securities and Exchange Board of India (SEBI).

A media report says that former board members and chief executives Ravi Narain and Chitra Ramkrishna and current chief of business development Ravi Varanasi are among those who have applied for settlement.

SEBI had issued notice to the NSE in May and to 14 officials (former and current) regarding preferential treatments given to some brokers. This arbitration system, available with SEBI, can be compared to out-of-court settlements in normal cases. The NSE has no option but to comply.

There was an administrative gap at the NSE for a while, and as soon as Vikram Limaye took over as CEO in June (he quit as member of the Supreme Court-appointed Committee of Administrators of the BCCI) the exchange filed its consent application with SEBI. The media report says that 12 of the 14 notified officials have filed their consent applications.

However, it is said that the man responsible for the technical part of the NSE has yet to file his consent application. In his absence, things could get murkier.

What is HFT?

In this context, it becomes necessary to know the exact nature of the NSE’s folly.

Trading on the stock markets, at least in certain sections of it, has evolved beyond normal human reaction levels. Certain sections of trading are now being done in hundredths and even millionths of a second. This is way removed from what billionaire investor Warren Buffet and his company Berkshire Hathaway does. While Buffet believes in staying invested in a stock for a while, sometimes for a very long while, there are High Frequency traders (HFT) who have brought this time down to milliseconds.

This trading technique arrived in India a decade earlier and the Securities and SEBI allowed it in 2007-2008. This was allowed across many asset classes, such as equity, currency and commodity, which means that within the overall trading environment now exists advanced computers that use special algorithms to offer, buy and sell and incredible speeds.

Technically, this would be done on very small price differences, things big investors would really not be interested in, but if worked on massive volumes (which they are) these computer traders rake in huge profits each day. They make money if they win, and they make money if they lose. This happens on their micro-commissions on each trade, win or lose. It is, therefore, a win-win. Also, for an investor going in for the long haul, the asset values rarely change because of HFT, a complete cycle of spikes and troughs (in stock value) being completed in a couple of trading hours. Unless, of course, there is an interested party that wants to drive down a stock or artificially add value to it, in which case it becomes illegal.

That is where co-location comes in. The basic idea is location. Nearer the broker’s office and his systems are to the exchange, earlier (even if it is a millisecond earlier) does it get the information through the cables connected to the exchange. Logically, it would require huge investment on the part of the broker to arrange for offices nearer the exchange and more funds to arrange for super advanced computers and expensive software and algorithms. So, while participation is low, competition is fierce.

If, amid this, the exchange had provided a further advantage (in time) to some brokers, it robs the rest the level playing field they demand.

The case was all about that.

The problem with HFT is that while it is legitimate, there are few instruments within the grasp of SEBI (or even the US’ Securities and Exchange Commission, for that matter) even today to totally control and oversee this lightning-fast activity. ‘Spoofing’, for example, is a disruptive algorithmic trading entity, in which algorithms often throw up notices of interest in buying a stock for a few milliseconds before withdrawing without trade being completed. That, in turn, drives up a stock, which also settles a direct course of trade for a short time. Fast computers and algorithms then utilise this predictable trajectory to benefit.

With most computer systems within HFT facilities at almost the same level, running similar algorithms, a minor time advantage is of great use.

The source

Dalal had gained access to a document from Singapore that opened the can of worms. The magazine wrote: “Fortunately, we have in our possession a detailed document that blows the whistle on what’s possibly going on in NSE. The document came by snail mail from Singapore and addressed to Mr B K Gupta, DGM Securities and Exchange Board of India (SEBI). It is dated 14th January 2015 with a copy to Sucheta Dalal. It is not clear what SEBI has done with it in all these months.”

The NSE wanted this news to be aborted. When it was not, the defamation suit ensued.

NSE moved the Bombay High Court on 21 July 2015 to stop the publication and circulation of the article and also asked Moneylife to offer an unconditional apology. This application was heard by Justice Gautam Patel, who passed severe strictures against NSE and imposed a cost and penalty of Rs 50 lakhs. Moneywise Media was represented by Advocate Bapoo Malcolm while Debashis Basu and Sucheta Dalal argued their own positions. NSE had filed an appeal against this order before a division Bench of the Bombay High Court.

Then the NSE told the division Bench of Justice Naresh Patil and Justice Z A Haq that it would honour the judgement of Justice Patel and withdraw appeal in the defamation case.

In any case, this could put brakes on technical trading that really adds no value to the overall net worth of a stock or company.[/vc_column_text][/vc_column][/vc_row]

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Union Budget 2026 highlights: Nirmala Sitharaman Raises Capex to Rs 12.2 Lakh Cr, West Bengal Gets Major Allocation

Finance Minister Nirmala Sitharaman is presenting the Union Budget 2026 in Parliament today. Follow this space for live updates, key announcements, and policy insights.

Published

5 days ago

on

February 1, 2026

By

Finance Minister Nirmala Sitharaman arrives to present Union Budget 2026

Finance Minister Nirmala Sitharaman will shortly present the Union Budget 2026 in the Lok Sabha, marking her ninth consecutive Budget. The annual financial statement is expected to outline the government’s policy priorities, reform agenda and spending plans for the coming year. Stay tuned for live updates, key announcements and immediate reactions as the Budget speech unfolds.

Finance Minister Nirmala Sitharaman tabled her ninth Union Budget today, beginning her speech at 11 am.

Nirmala Sitharaman is set to present her ninth Union Budget today, with the finance minister scheduled to begin her speech at 11 am.

Budget 2026 live updates: Presenting the Union Budget for 2026–27, Finance Minister Nirmala Sitharaman said the occasion coincided with Magh Purnima and the birth anniversary of Guru Ravidas. She noted that over the past 12 years, India’s economic journey has been defined by stability, fiscal discipline, sustained growth and moderate inflation.

The budgeted fiscal deficit for fiscal 2026 is estimated at 4.4 per cent of gross domestic product (GDP)

Planned capital expenditure this fiscal year Rs 11.2 lakh crore

Rare earth corrdiors in Odisha and Kerala

Hi-tech tool rooms to be set up by PSUs

Construction equipment scheme to be launched

Container manufacturing scheme for Rs 10,000 crore over 5 years

Rs 10,000 crore SME Growth Fund

Semi-conductor mission to get Rs 40,000 crore

Rs 12.2 lakh crores for infrastructure development

Dedicated RITES to repurpose land of Central PSUs

20 new waterways over next 5 years to be connected

7 high-speed corridors on rail

High-level committee on banking for next phase of Viksit Bharat

Capital expenditure hike of to ₹12.2 lakh crore in Budget 2026, with West Bengal receiving a significant share of allocations.

Mahatma Gandhi Gram Swaraj Initiative aimed at boosting the khadi, handloom, and handicrafts sectors.

High-speed rail corridors: Mumbai-Pune, Pune-Bengaluru, Hyderabad-Bengaluru, Chennai-Bengaluru, Delhi-Varanasi, Varanasi-Siliguri, Pune-Hyderabad

Five university campuses to be established near industrial corridors

Lakpati Didi program expanded in Budget 2026 to reach more beneficiaries across India.

Fiscal deficit for FY26 revised to 4.4%; Budget Estimate for FY27 set at 4.3%.

TCS on overseas tour packages cut to 2% to ease travel costs

Tax holiday to foreign companies that provide cloud services by setting up data centres in India till 2047

17 cancer drugs exempted from import duties

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Union budget 2026 to be presented on Sunday with special trading session

The Union Budget 2026 will be presented on a Sunday for the first time in over two decades, with NSE and BSE announcing special trading sessions for the day.

Published

6 days ago

on

January 31, 2026

By

Nirmala Sitharaman

For the first time in more than two decades, the Union Budget will be presented on a Sunday. Finance Minister Nirmala Sitharaman is scheduled to table the Union Budget for 2026 in the Lok Sabha on February 1 at 11 am, even as the day is usually observed as a holiday for government offices and financial markets.

February 1 falls on a Sunday this year, raising questions about market operations and investor response. To ensure uninterrupted trading and immediate market reaction to budget announcements, stock exchanges have announced special arrangements for the day.

Markets to remain open on budget day

Both the National Stock Exchange and the Bombay Stock Exchange have confirmed that markets will remain open on February 1. The NSE has announced a special trading session, with the pre-open market scheduled from 9 am to 9:08 am, followed by normal trading hours from 9:15 am to 3:30 pm.

The BSE has also declared the day a special trading day, with regular market hours applicable. Trading is expected to continue across equity, derivatives, and futures and options segments.

What the Sunday budget means for investors

A weekend budget presentation is seen as offering certain advantages for market participants. With trading active on the same day, investors will be able to respond to policy announcements immediately rather than waiting for the next working day.

The Sunday timing also gives investors, analysts, and financial institutions additional time to go through detailed proposals, including tax changes, fiscal deficit targets, and sector-wise allocations. The extended window for analysis may help reduce sharp, headline-driven reactions and encourage more informed decision-making.

With fewer competing developments on a non-working day, budget announcements are also expected to receive more focused attention from markets and stakeholders.

Parliamentary schedule and key milestones

The Economic Survey is expected to be tabled on January 29, ahead of the budget presentation. The Budget Session of Parliament began on January 28 with the President’s address to a joint sitting of the Lok Sabha and Rajya Sabha.

The upcoming budget will mark Nirmala Sitharaman’s ninth consecutive Union Budget. It will also be India’s 80th budget since Independence. Since 2017, Union Budgets have been presented at 11 am on February 1, following a timing change introduced during the tenure of former finance minister Arun Jaitley.

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Modi says right time to invest in Indian shipping sector; meets global CEOs

Published

3 months ago

on

October 29, 2025

By

PM Narendra Modi

Prime Minister Narendra Modi on Wednesday exhorted global investors to take bets on the Indian shipping sector, pointing out that this is the “right time” for such a move.

The Prime Minister also met a select chief executives of global majors, including DP World and APM, at a specially convened meeting on the sidelines of the India Maritime Week 2025 held here.

“For all of you hailing from different countries, this is the right time to work in the Indian shipping sector and also expand (your presence),” Modi said during a public address before the closed-door meeting with CEOs.

Modi listed several targets being chased by India in the maritime sector over the next few years, and underlined the importance of the global community in the same.

“You all are an important partner who will help us achieve all our aims. We welcome your ideas, innovations and investments,” Modi said.

He said that India allows 100 per cent foreign direct investment in the shipping and ports sector, and also provides incentives under the “Make In India, and Make For The World” vision.

Addressing an audience, including leaders of various companies, the Prime Minister affirmed India’s commitment to strengthening the supply chain resilience at a global level.

He also said that India is engaged in creating world-class mega ports, and cited the work undertaken on the Vadhavan Port to the north of the financial capital, which entered the top-10 firms in the world on the first day.

The government is also looking to grow the capacity at 12 major ports by four times and increase India’s share in containerised cargo at the global level.

Later, Modi held a meeting with top CEOs of shipping sector companies from across the world.

As per people in the know, he met AP Moller-Maersk Chairman Robert Maersk Uggla, DP World Group Chairman Sultan Ahmed bin Sulayem, Mediterranean Shipping Company Chief Executive Soren Toft, Adani Ports and SEZ Managing Director Karan Adani and French company CMA-CGM’s Senior Vice President Ludovic Renou.

The participation from over 85 countries in the IMW sends a strong message, Modi said, noting the presence of CEOs of major shipping giants, startups, policymakers, and innovators at the event.

The Prime Minister also thanked Port of Singapore (PSA) for the nearly Rs 8,000 crore investment in the Jawaharlal Nehru Port Authority’s fourth terminal, pointing out that this is also the largest FDI in the port sector in India.

Modi said more than 150 new initiatives have been launched under the ‘Maritime India Vision’, resulting in nearly doubling the capacity of major ports, a substantial reduction in turnaround time, and a new momentum in cruise tourism.

—PTI

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