All about National Stock Exchange (NSE) Algo Scam.
                     All about National Stock 
Exchange (NSE) Algo Scam
INTRODUCTION
• Market regulator Securities and Exchange Board of India (SEBI) has imposed 
penalties on National Stock Exchange (NSE) and its former chiefs Ravi Narain 
and Chitra Ramakrishna in the co-location (colo) scam.
Source: www.moneylife.in
RS1 CRORE PENALTY ON NSE
• SEBI’s adjudication officer has imposed a penalty of Rs1 crore on NSE for the 
Exchange's failure to ensure a level playing field for trading members 
subscribing to its tick-by-tick (TBT) data feed system.
Source: www.moneylife.in
PENALTY ON CEO & MD
• NSE's former managing directors (MDs) and chief executives (CEOs) Ravi Narain 
and Chitra Ramkrishna, are penalised with a fine of Rs25 lakh each.
Source: www.moneylife.in
THE LACK OF PROCESSES
• The order shows that even here, despite a mountain of data and specific 
reports and simulations by various consultants and expert agencies, the 
regulator has made no attempt to pin down who was specifically responsible 
for the lack of processes, systems and documents that led to the algo scam.
Source: www.moneylife.in
EVALUATION
• It is unclear if this indicates a lack of expertise in SEBI to evaluate various 
submissions and investigations and draw firm conclusions. 
Source: www.moneylife.in
SECC REGULATIONS
• NSE has failed to comply with the provisions of SECC Regulations in letter and 
spirit and Ravi Narain and Chitra Ramkrishna are vicariously liable for the acts 
of omissions/ commissions committed by NSE during the investigation period.
Source: www.legalera.com
ALGO TRADING SCAM
• In May 2019, SEBI had indicted well-known market economist Ajay Shah, and 
Suprabhat Lala, a senior official of NSE in the algo trading scam.  
• The order said a private firm of Sunita Thomas (Mr Lala’s wife and sister-in-law 
of Ajay Shah), 'commercially exploited' confidential data obtained from the 
NSE for writing algo trading software.
Source: www.moneylife.in
LEGAL ACTION
• SEBI had also directed NSE to take legal action against Mr Shah, Ms Sunita 
Thomas, her firm Infotech Financial Services Pvt Ltd, and Krishna Dagli, director 
of the company. 
Source: www.moneylife.in
CONTRACT TO INFOTECH FINANCIAL
• One of the orders indicts Ravi Narain and Chitra Ramakrishna, both former 
MDs of NSE, for overlooking conflict of interest in awarding contract to 
Infotech Financial.
Source: www.moneylife.in
CO-LOCATION OPERATION
• SEBI estimated that NSE earned a profit of Rs624.89 crore during 2010-11 to 
2013-14 from its co-location operation. 
• Finding Mr Narain guilty in the case, SEBI has asked him to disgorge 25% of the 
salary drawn for FY10-11 to FY12-13 to the IPEF. 
Source: www.moneylife.in