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Informist, Friday, Aug. 1, 2025

 

--[I] NSE pays INR 403.50 mln to settle SEBI inspection between 2021-22

 

NEW DELHI – The Securities and Exchange Board of India issued a settlement order of INR 403.5 million Friday and said the National Stock Exchange of India Ltd. had settled a case pertaining to the market regulator's inspection findings on the NSE for the period from Feb. 1, 2021, to Mar. 31, 2022. The company paid the settlement amount at the end of June, it said. As per the settlement regulations, SEBI will not initiate any enforcement action against the exchange on its findings.

 

The main inspection finding for the period was that NSE had outsourced the activity of storage of media tapes containing historical trade data to a third party vendor without a legally binding written contract. This had resulted in a failure of the exchange to comply with its obligation on safekeeping of trade-related data and prevention of unauthorised usage of proprietary, broker-related and market-sensitive information.

 

SEBI said in the settlement order an internal committee at NSE had taken upon itself to waive off penalties levied as per the member and core settlement guarantee fund committee policy without the committee's approval. SEBI, however, did not specify the quantum of penalties that were waived by the exchange.

 

Another finding from SEBI's inspection pertained to a subsidiary of the exchange outsourcing price-sensitive information of listed companies to a third party vendor without any legally binding agreement in place. Quoting another finding from its inspection in its settlement order, SEBI said client code modifications were being permitted for trades between two unrelated institutional clients without verifying genuineness and without penalisation.

 

These and a couple of more instances were in breach of regulations and SEBI's circulars. Before SEBI took a call on initiating enforcement proceedings against NSE on its inspection findings, the exchange approached it with a settlement application.  End

 

Reported by Rajesh Gajra

Edited by Rajeev Pai

 

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