NSE Vice Chairman Ravi Narain has put in his papers amid regulators intensifying their probe into alleged lapses in high-frequency trading offered through the exchange’s ‘co-location’ facility. The role of some top officials including Narain, who is also an ex-CEO of the bourse, is also being looked into by markets regulator Sebi.
Sources said Narain stepped down as vice chairman to ensure that the process with market regulator Sebi on the co-location case should not get affected by his presence on the NSE board. He has taken the decision keeping in mind best corporate governance practices, they added. Narain submitted his resignation papers with NSE chairman Ashok Chawla last night. Sources said the NSE board is yet to accept his resignation.
The Finance Ministry is also keeping a “close watch” on the case and wants Sebi to fast-track the investigations as it involves the country’s largest stock exchange in terms of turnover and may have a bearing on the overall market sentiment, sources had earlier said.
The case relates to some brokers allegedly getting preferential access through co-location facility at the NSE, early login and ‘dark fiber’ –which can allow a trader a split-second faster access to data feed of an exchange. Even a split-second faster access is considered to result in huge gains for a trader.
Narain has been with NSE since its inception in 1994 when late R H Patil set up this exchange as India’s first automated bourse and an alternative to BSE, the then the country’s largest exchange. He had served as managing director and CEO of the stock exchange for 12 years.