NSE scam smacks of nexus with SEBI
According to our Sprouts’ Special Investigation Team (SIT) the matter being examined is how exactly were members of the broking community able to gain advance information on the movements of stock pricing after managing to bypass the NSE’s trade access point (TAP).
The TAP is actually a software network that is designed to act as a connectivity point between the broking or investing community and the Exchange. It is in place to ensure that no unfair advantage or advance information can be obtained by members of the investment community for the purpose of exploitation or profiteering.
How brokers bypassed NSE’s TAP
Our SIT unearthed that this unholy nexus enabled brokers to bypass the TAP to make massive profits by placing huge orders in advance. This enabled select members of the broking community to make illegal gains, running into thousands of crores of rupees. As of now, the scale of the illegal profiteering is placed by the nodal agencies somewhere near INR 50,000 crores.
Credibility of NSE is at stake
Our SIT also learnt that the Income Tax department carried out extensive raids on the premises of brokers connected with the scam and were able to track email communication that disclosed how exactly they could surpass TAP and gain privileged information that helped them in unfair profiteering.
In addition, our SIT also learnt that despite repeated complaints being made to the market regulator SEBI, there was no proactive response. On the contrary, the regulator asked the NSE to investigate and probe the matter. Circumstantially, this led some market operators to believe that there is a possibility of nexus between the regulator and senior NSE management officers including Chitra Ramkrishna (CEO) and Anand Subramaniam (COO).
