Economy
Finance Ministry questions ratings process of Moody's
Economic Affairs Secretary Shaktikanta Das on Thursday questioned the decision of Moody's for a ratings review of India in two years' time, and said the agency's exercise must consider all aspects of reforms being undertaken by the country with a sound methodology.
 
"Moody's had taken a position that they would consider a ratings upgrade after two years. Our concern was only about the methodology of the whole process," Das told reporters here, two days after the ratings agency alluded that India's ratings review could emerge in the medium term.
 
"We would expect interactions with the Finance Ministry and the Government to take place. Then, of course, they are a rating agency and they are entitled to arrive at their own conclusions. But due process has to be followed, you cannot jump the gun," Das said.
 
The secretary said that without such an exercise, such a conclusion will prove dificient. He also said that reforms in India were now gathering significant roots and developing sufficient depth, which can't be doubted.
 
"In the past two years, especially, the number of reforms, the kind of reforms and the pace of reforms being taken by the government -- due weightage has to be given."
 
Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.

 

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ISRO to launch IIT-B students' satellite on Monday
Indian space agency ISRO will shoot off the "Pratham" satellite designed and built by students of the IIT-Bombay among the eight satellites including its weather satellite on Monday, an official said here.
 
Conceptualised in 2008 with the aim of making IIT-B a centre for space science and technology research, the satellite weighs just 10 kg, is designed to fit within a cube of 30 cms, and has a life span of around four months.
 
"The objective of Pratham is to empower the students involved with the skill set required to develop a statellite through various stages of design, analysis, fabrication and testing," said the official.
 
The project will also kickstart a collaboration between IIT-B and other Indian universities keen to contribute in the space sector and to share knowledge and facilties.
 
This has led to completion of ground-stations for tracking the satellite in several college, including the Atharva College of Engineering here.
 
The IIT-B has collaborated with some international universities like UCL, London and IPGP, Paris for the project.
 
Pratham will transmit data when it passes over India and any university with a small ground station can detect its signals and measure the total electron counts (TEC) above the ground station as part of the education process to spread awareness among the students.
 
The student-designed satellite's mission is four-fold: acquiring knowledge in the field of satellite and space technology, to fully design it by the students of IIT-B, launch it and measure TEC of uonosphere above India and Paris, and involve students from other universities in the satellite project, said the official.
 
Pratham's payload instrument comprises two monopole antennae transmitting at 145.98MHz and 437.45MHz.
 
Measuring 30.5 cm by 33.4cm by 46.6 cm, it weighs 10.12 kg, is made of aluminium alloy and other space-grade materials, and has an on board computer.
 
It has three monopoles, GPS, magnetometer, sun sensors, magnetorquers and is powered by Li-ion battery and four solar panels.
 
It will be positioned in a sun-synchronous orbit around 670 km away and will pass over India around 11.30 a.m. 
 
For the project, entirely funded by the IIT-B, the ISRO has provided lot of technical help in terms of testing and guidance and the integration of the flight model of Pratham for which tests have been carried out in ISAC, Bangalore and SHAR, Sriharikota.
 
Each year in September, a rigorous selection test was conducted for all IIT-B students from which they were inducted into the Pratham team and formalized after ascertaining their satisfactory work.
 
The current strength of the team which has completed the project after more than eight years is around 30, the official said.
 
Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.

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NSE ordered to appoint auditor to investigate “wrongdoing”, put unlawful gains in escrow account: Reports
The market regulator Securities and Exchange Board of India (SEBI) has ordered National Stock Exchange to appoint a third-party auditor to examine allegations of unfair access to the Exchange for some brokers in algorithmic trading, say media reports. SEBI also asked the Exchange, to deposit in an escrow account all revenues from the practice, including fibre connectivity between colocation facilities of brokers and their offices, the report from Economic Times added. 
 
Quoting an official from the NSE, who did not want to be named, Livemint, in its report says, "We have been asked to submit a report within three months. We will get the issues raised by the regulator by a third party external agency.”
 
The allegations of wrongdoing at the NSE was first published by Moneylife on 19 June 2015 based on a whistleblower’s letter. Before publishing, Moneylife managing editor Sucheta Dalal had requested NSE’s top brass to respond to the allegations. However, NSE has filed a Rs100-crore defamation suit against Moneylife for bringing the contents of the whistleblower’s letter to public attention. A notice of motion to gag Moneylife until the suit comes up for hearing was, however, shot down by Justice Gautam Patel of the Bombay High Court, who also ordered the NSE to pay Rs50 lakh as penalty mainly to two hospitals in Mumbai. The whistleblower sent a second letter to SEBI in August 2015 explaining how SEBI could verify his allegations of how NSE’s systems were compromised. SEBI kept mum about this even as it watched the outcome of NSE’s defamation charge against Moneylife.
 
The Economic Times (ET), in its report on Thursday, revealed that the market regulator has ordered NSE to investigate the possible collusion of its officials with brokers that may have led to breaches of fair access norms by providing unfairly preferential treatment to some. 
 
"SEBI wrote to NSE Chairman Ashok Chawla in the wake of findings by an expert committee on the practice of colocation, or the placement of servers belonging to brokerages adjacent to those of the exchange for a fee to give them an advantage in terms of speed. In the interim, SEBI said all revenue stemming from the practice, including from fibre connectivity between brokers' colocation facilities and their offices, should be paid into an escrow account. The letter didn't contain details on how this should be implemented," the report from ET says.
 
SEBI first wrote to NSE on the issue on 29 March 2016. NSE responded to these letters on 12th May and 29 June 2016. This was followed by the expert committee's findings being handed over to the NSE Board on 7 July 2016. 
 
As per the reports, NSE has been asked to submit the report within three months to SEBI. 
 
As reported by Moneylife in April this year, the powerful technical advisory committee (TAC) of SEBI had conducted a detailed investigation of the NSE high frequency trading (HFT) and vindicated the contentions of an anonymous whistleblower who wrote three letters on how the Exchange’s trading systems gave better access to certain entities allowing them to make huge profits. The Finance Ministry as well as the Standing Committee of Parliament have had asked SEBI for a copy of TAC’s report.
 
The Committee, chaired by Dr Ashok Jhunjhunwala, met on 15 March 2016 to discuss a report submitted by Prof Om Damani who was entrusted with the task of investigating the whistleblower’s letters. The TAC took note of the following findings confirmed from the whistleblower’s letter. 
 
  • Technical details about how brokers could get advantage in connecting to the NSE’s servers because the Exchange had no ‘load balancers’ and ‘randomisers’ in its systems architecture.
  • That OPG Securities, a brokerage firm mentioned in the first letter, had, indeed, tried to exploit loopholes and it is ‘plausible’ that OPG and some other brokers were given preferential access to back-up servers. More importantly, that OPG ‘gained materially’ by exploiting the system. In this connection, it further said that while it has studied data and submissions from the NSE, “It is not possible from the data available alone to investigate and determine the extent of collusion of NSE officials with OPG/ others.”
  • The team also found that OPG’s ability to happily exploit the system ended when the system architecture changed. The committee agreed “that OPG Securities was able to exploit the architecture to gain undue and unfair advantage and NSE failed to prevent such manipulative practices by OPG.”
  • The team found that the architecture of NSE with respect to dissemination of Tick-by-Tick (TBT) through TCP/IP was prone to manipulation/abuse. When SEBI requested NSE to investigate this, NSE claimed that their architecture could not be, and has not been, misused. In spite of NSE not providing adequate details on the issue, the available data was examined and the report conclusively shows that OPG consistently logged in to the servers with better hardware specifications. It also finds that information on back-up servers was not transparently communicated to all brokers in 2011-12 and earlier.
  • From the third letter, it was confirmed that the staff of Sampark Infotainment, visited NSE on multiple occasions for laying fibre cables, installation, etc, on behalf of Ways2Wealth and GKN. The whistleblower had contended that Sampark had provided a ‘dark fibre’ link to Ways2wealth, giving better access. Here is what the TAC-commissioned report says, “With regard to the issue of dark fibre, the Committee was of the view that in violation of its own policy on allowing only ISPs, NSE allowed non-ISPs like Sampark, to lay fibre in its premises for various members.”
 
The report further said that NSE had “violated norms of fair access and allowed some brokers to benefit. Also, when the complaint was made to NSE, its management had dismissed it and did not initiate any steps to check the possibility of any collusion with the staff of NSE.”
 
TAC did not stop at merely accepting the report.  It says, “SEBI may initiate immediate action for lapses on the part of NSE and exploitations made by OPG under the guidance of the Committee,” and that SEBI should constitute a team of people with appropriate background to “investigate the collusion aspect between NSE officials and OPG.”

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COMMENTS

Anil Kumar

8 months ago

Great work Moneylife / Sucheta Ma'am. You have persistently highlighted this. Finally it has led to action. Seems unbelievable how NSE almost got away with this!

R Balakrishnan

8 months ago

Asking NSE to 'appoint' a third party auditor is as effective as Company boards appointing "independent' directors. SEBI should have give the task to a separate firm. And ordered a forensic audit. Surely, all is not well at NSE and SEBI seems to be soft pedalling

Shrikant Dattatraya Sahasrabuddhe

8 months ago

Continue your good work.All the Best.

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