NSE, Vikram Limaye pay Rs 643 crore to Sebi, settle TAP misuse case

National Stock Exchange (NSE) former managing director (MD) and chief executive officer (CEO) Vikram Limaye, and eight others are set to settle a case pertaining to misuse of trading access point (TAP) by agreeing to pay Rs 643 crore to the Securities and Exchange Board of India (Sebi).

In the TAP matter, the markets regulator had issued a show-cause to the exchange in February 2023. This was following its findings that there was a possibility of bypass in the system by brokers and that NSE did not take appropriate remedial steps.

TAP refers to a software application deployed by NSE and used by stock brokers to establish communication (orders/trades) with its trading system.

It was launched in 2008 and continued till September 2019 for the equity segment. The exchange had introduced ‘Direct Connect’ as an alternative to TAP in 2016.

The exchange had filed a settlement application before the regulator first in 2023 and then a revised application in August 2024.

Under the settlement proceedings norms, the matters can be settled without admitting or denying the findings by the regulator.

The settlement amount has been decided by a high-powered advisory committee (HPAC) and later approved by a panel of whole-time members (WTMs) of Sebi.

“The panel of WTMs accepted recommendations of the HPAC to settle the matter on composite payment by NSE for an amount of Rs 643 crore,” said the settlement order.

In the order, Sebi WTM Ashwani Bhatia also directed the former executives to do pro-bono community service of at least 14 days in the current financial year.

The resolution of key legal proceedings will help NSE push ahead with its much-awaited initial public offering (IPO).

The exchange has also applied for a no-objection certificate (NOC) with Sebi for granting approval for filing IPO documents.

Last month, Sebi had dropped charges against NSE and its seven former executives, including Chitra Ramkrishna, Ravi Narain and Anand Subramanian, in the co-location case. It cited an absence of evidence to support the allegations.

In its order, Sebi WTM Kamlesh Varshney had noted that while there were certain lapses at the NSE's colo facility, there was no evidence to establish any “collusion” or “connivance” with stock broker OPG Securities. OPG is believed to have gained “unfair” access to the exchange’s secondary server.


IN CONTEXT

 Sebi had issued a show cause to NSE, others in February 2023

 Findings included lapses in the TAP, lack of remedial measures from NSE to prevent bypass

 NSE filed revised settlement application first in 2023 and then in June this year

 Calculation of the settlement amount in line with the revenue generated and profits made through TAP subscriptions

 The settlement amount was recommended by a high-powered advisory committee, approved by panel of WTMs