SAT sets aside Rs 624 cr disgorgement case against NSE, former top brass

In a major relief to the National Stock Exchange (NSE) and former MD & CEO Chitra Ramkrishna, the Securities Appellate Tribunal (SAT) on Monday set aside Rs 624 crore disgorgement order against NSE by the Securities and Exchange Board of India (Sebi).

The tribunal has directed NSE to pay a penalty of Rs 100 crore for failing to follow due diligence. Legal representatives said that findings against NSE have been partially set aside.

Furthermore, SAT also set aside disgorgement orders against Ramkrishna and ex-NSE CEO Ravi Narian. In a relief to both, their debarment has been reduced from five years to the period already gone by, said legal sources. However, findings against them in SEBI order have been upheld.

The tribunal dismissed intervener appeals on the matter and findings against NSE in the case have been partially set aside, said legal sources.

In the hearing, SAT also upheld all findings against OPG Securities and sent the matter back to Sebi for recalculation of disgorgement. The markets regulator has been provided with four months’ time to do the recalculation.

On the matter, Sebi was represented by legal firm The Law Point.

In an order against NSE in April 2019, the market watchdog had ordered the exchange to pay Rs 624 along with an interest of 12 per cent per annum, calculated from April 2014 for violations Stock Exchanges and Clearing Corporation (SECC) Regulations.

The co-location matter refers to complaints against NSE for allegedly giving preferential access to some clients which provided them with trading advantage.

NSE had launched the co-location facilities in 2009 which permitted traders and brokers to establish their IT servers within the premises of NSE’s data centres in return for a fee. These participants could access the stock prices’ information faster, resulting in faster trade execution.