SEBI to scan historical data to pin brokers in NSE access breach


Tarun Sharma

The Securities and Exchange Board of India will analyse historical trading data on the National Stock Exchange to identify the brokers which benefitted from preferential access to the exchange servers.

The favoured access meant that some brokers were able to execute their trades quicker than others and were in a better position to exploit opportunities.

The forensic report by consultancy firm Deloitte has named one broker—OPG Securities—as having benefitted from the preferred access, but has been largely inconclusive other than stating that some brokers got preferred access.

OPG Securities was also named in the whistleblower’s letter to a financial magazine, highlighting the breach in NSE’s system.

The Deloitte report has said that the breach may not have been possible without the knowledge of certain employees, who did not take any action despite evidence that something was amiss.

At the same time, Deloitte has said that it was not in a position to comment on whether there was a collusion between the NSE officials and brokers for sure.

“OPG’s name has figured in the report of the technical advisory committee as well,” a source told Moneycontrol, adding “we are trying to identify other brokers who may have benefitted.”

In the ‘risk factors’ of its draft offer document, NSE mentioned the Deloitte finding that “its co-location facilities and tick-by-tick, or TBT, architecture were vulnerable to manipulation and abuse, violated norms of fair access and compromised market fairness and integrity, as certain select trading members who availed of our co-location facilities were able to gain materially from the exploitation of our market feed dissemination architecture to receive market data more quickly than other trading members.”

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