Co-location case: NSE initiates talks with Sebi on consent plea

Leading stock exchange NSE today said it has initiated fresh talks with markets regulator Sebi to settle a probe into the co-location issue through consent mechanism.

"Now, Sebi has completed its work so we have again started the conversation with the regulator on consent," NSE MD and CEO Vikram Limaye told reporters here.

A consent settlement allows entities to settle charges by paying a penalty without admission or denial of guilt.

The regulator is seeking a settlement with the regulator in connection with a probe relating to allegations of unfair access to its high frequency trading systems to some brokers.

The exchange's Rs 10,000 crore initial public offer has been delayed because of the probe in the co-location matter.

"The timeline for the IPO is dependent on the resolution of the regulatory matters with Sebi," Limaye added.

Last month, Sebi issued fresh show-cause notices to the National Stock Exchange (NSE) and several of its former and current executives.

The Securities and Exchange Board of India (Sebi) has been probing the alleged lapses in high-frequency trading offered through NSE's co-location facility. It was also investigating whether some brokers had unfair access to the exchange's co-location facility.

NSE's co-location facility allows low latency and fast execution to trading members. This setup of server gives a 10:1 speed advantage in comparison to other brokers.

Earlier in March, Sebi had returned its consent application into the co-location issue due to ongoing investigations in the case.

The regulator had returned NSE's settlement plea as the probe is at critical position with regard to brokers and former senior executives of the exchange, as per regulatory sources.