I-T searches premises of top NSE officials in co-location case; ex MDs Narain, Ramkrishna on the list

The Income Tax Department is conducting raids at all officials of the National Stock Exchange in relation to the algo trading case.

The Income Tax Department is conducting search operations at the premises of National Stock Exchange officials and brokers whose names figure in the co-location server controversy, sources told.

These officials and brokers included former MDs Ravi Narain and Chitra Ramkrishna, Suphrabhat Lala, and promoter of OPG Securities, Sanjay Gupta.

OPG Securities is at the centre of the ‘co-location controversy’ on the NSE, in which some brokers who had availed of the server co-location facility, got preferential access to the exchange’s trading system. These brokers had somehow managed to connect to the exchange’s back-up server, and hence could access the price feed faster, giving them an advantage over other brokers. It is alleged that the breach happened with the connivance of some NSE officials, though it has not been proved yet.

The National Stock Exchange on Wednesday submitted a forensic audit report on the cash market, currency derivatives, and interest rate futures markets relating to the ongoing co-location case. This forensic report has been prepared by E&Y and the Indian School of Business. Now, SEBI will prepare a future course of action based on the findings of the forensic report.

A few trading members on the NSE are alleged to have made a killing by unfairly gaining faster access to the price feeds, and it is suspected that some employees may have helped them. The case is being investigated by SEBI.

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