Wake-up call for NSE

Sebi, exchanges have to work out a robust policy on co-location

After an investigation process that dragged on for years, the Securities and Exchange Board of India (Sebi) on Tuesday released a comprehensive set of orders on the National Stock Exchange (NSE) co-location controversy. The regulator said there was no evidence of fraud committed by the NSE, but the exchange did not exercise adequate due diligence while selecting its trading architecture, thereby creating an environment in which information dissemination was asymmetric. The exchange has also been indicted for “bad governance”, and criticised for its inconsistent “dark fibre” policy. The punishment has been severe: The exchange has been debarred from accessing the