Several trading members who had co-location and “advance” log-in facility to access the National Stock Exchange (NSE) data feed have come under the scanner of the Central Bureau of Investigation (CBI), which had conducted searches at more than 10 locations last week.
It is learnt that during the searches, the agency has seized voluminous data pertaining to the transactions done during the check period. It had earlier collected the related documents from the Securities and Exchange Board of India (SEBI), which has been dealing with the co-location cases.
In May 2018, the agency registered a case alleging that Delhi-based broker firm OPG Securities, owned by Sanjay Gupta, and some others used an algorithmic software during 2010-14. The accused also took advantage of the then co-location facility to gain faster data access through the exchange’s secondary server.
The software had been developed by accused Ajay Narottam Shah based on the exchange’s trade data collected in 2005-06 for some research work. The data was shared with Infotech Financial Services Private Limited and Mr. Shah in spite of the fact that the company used to supply algorithmic trading software to the brokers in the NSE.
Last month, the CBI filed a chargesheet against the former NSE managing director, Chitra Ramkrishna, and its former group operating officer, Anand Subramanian. While Mr. Subramanian was arrested in February, the agency subsequently arrested Ms. Ramkrishna after several rounds of questioning. The SEBI had earlier levied fines on the two accused and others on multiple counts. The Income-Tax Department also searched their premises in Chennai and Mumbai.