The Securities and Exchange Board of India(SEBI) on Wednesday penalised brokering firm Adroit Financial Services and Silver Stream Equities for their alleged involvement in the NSE colocation matter.
Both the brokers have been asked to pay a fine of Rs 600,000 each.
Sebi order says they continuously tried to log into the secondary server of NSE for faster access.
The matter dates back to between 2010 and 2014.
As per the Sebi order, Adroit logged into the backup server of NSE in the currency derivatives segment for 320 trading days during the investigation period. On the other hand, Sebi noted that Silver Stream logged into the secondary server of NSE in futures and options segment for 201 trading days during the period.
They continued to log into to the secondary servers despite a ‘reprimanded’ from NSE
“By circumventing the primary source on a regular basis, the noticee engaged in conduct which undermined the trading system set up to provide fair and equitable access to all brokers who connected to it,” says the Sebi order.
The regulator, however, wasn’t able to establish any unfair gains made by the brokers.
“I note that the material on record does not bring out any gains made or unfair advantage availed or loss caused to investors by the Noticee due to the aforesaid violation,” the order adds.