In order to ensure fair access to the co-location facility, markets regulator Sebi
on Thursday directed stock exchanges
to allow direct connectivity between such facility of one bourse with the other.
Co-location or proximity hosting service is offered by stock exchanges
to brokers and data vendors allowing them to locate their trading and other systems within the premises.
have been asked to allow direct connectivity between servers of a stock
broker placed in co-location facility of a bourse and servers of the same stock
broker placed in co-location facility of a different bourse.
This facility should be available to all the co-located brokers, who are desirous to avail such connectivity, in a fair and equitable manner, Sebi
said in a circular.
are advised to allow direct connectivity between co-location facility of one recognised stock
exchange and the co-location facility of other recognised stock
exchange," it added.
While facilitating co-location facility, Securities and Exchange Board of India (Sebi) directed stock exchanges
to put in place necessary systems for implementation of its circular within one month.
said that co-location services provided by a third party or outsourced from a third party is deemed to be provided by the stock exchanges.
would have to ensure complete control and jurisdiction over the matters related to its co-location facility. Further, they will remain responsible and accountable for actions of such outsourced entity with respect to co-location services.
Also, they would have to submit a quarterly compliance report to Sebi
regarding the outsourcing services after placing it before the board of the respective stock exchanges.
The regulator said facility that allows stock
brokers and data vendors to connect to the stock
exchange trading system over a Local Area Network would fall within the definition of Co-location and proximity hosting.