Blowing the Whistle on Manipulation in NSE
We are crowd-sourcing investigation on a whistleblower account detailing how NSE’s system has been exploited. Please use the comment section to share your information
 
High-frequency trading using colocation that give traders advantages by a few milliseconds have come to occupy the centerstage of equity markets all over the world. Such automated trading, which executes pre-programmed instructions, generating thousands to millions of trades every trading day come out of black boxes designed by whiz kids in the secret corners of trading firms. If deployed unfairly, a tiny unfair advantage can translate into crores of rupees of illegal profit. 
 
Moneylife has repeatedly argued that India has no system of monitoring complex automated systems, leave along trading transaction. Consequently, organisations that operate such technology have become a law unto themselves, supervised by nobody. Even when there is a major glitch or a fat finger trade, no report is put into the public domain. 
 
So, if HFT trades are done illegally, they fly below radar and very few people about them. Fortunately, we have in our possession a detailed document that blows the whistle on what’s possibly going on in NSE. The document below was came by snail mail from Singapore and addressed to Mr B K Gupta, DGM Securities and Exchange Board of India (SEBI). It is dated 14th January 2015 with a copy to Sucheta Dalal. It is not clear what SEBI has done with it in all these months.
 
Moneylife has written to the SEBI Chairman, the chairman of National Stock Exchange, Ravi Narain, and managing director of NSE, Ms. Chitra Ramakrishnan, asking whether they have acted on this document. Our letters and text messages have been met with complete silence. In trying to get to the bottom of this over the last two months, we have shared this document with the exchanges, regulators, government agencies and key traders. We realised that the only people who can throw light on it are actual HFT players who understand how this game is played.
 
Hence we are putting out this long document to crowd source informed opinion and facts on this. Hopefully, your information will stir the investigative agencies into looking deeper into it. After reading this document, post your facts and information below. You need not use your actual identify. Your data is secure with us. If you want to write with specifics, please write to [email protected] or [email protected]
 
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COMMENTS

piyush kumar pathak

1 year ago

i am sure with my strongest gut feel there is a big fraud on very very small HFT manipulations these should be reported to SFIO of Ministry of corporate affairs

Radhakrishnan Ramachandra

2 years ago

Hi - I'm a victim of nse intraday manipulation - I was having account with Axis Securities. Went upto NSE IRGP and now in arbitration stage. Mr Raghunath Rakesh of NSE Bangalore says that they (NS) cannot investigate system related manipulation and that I need to approach Cyber Crime dept. They hv disposed my case with nil compensation, but there is no written mention of them asking me to approach Cyber Crime. NSE is not taking my problem seriously at all. That is the problem. When I first lodged complaint with SEBI they referred it to NSE. NSE is not of any help. NSE's IRGP / Arbitration are all not going to yield any result - its like going through the motion. Does it point to nexus. We need to really go to the bottom come to fight for justice.

Sucheta Dalal

3 years ago

Whistleblowers would be more valuable if they were in touch ...
Watching from a distance, jumping to conclusions about "self-imposed gags" and remaining silent when writers to battle is disappointing!!

Technology allows many ways of ensuring confidential communication.

A techie should know that!

REPLY

Anbalagan Veerappan

In Reply to Sucheta Dalal 2 years ago

Sent an email in detail adding more inputs to this.

V ganesan

3 years ago

I WOULD LIKE TO MENTION ONE EVENT HAPPENED RECENTLY IN LAST WEEK 13 TH OF AUGUST THURSDAY I WAS IN MY BROKER OFFICE. Suddenly in the after noon BOTH canara bank and bank of baroda
shoots up suddenly with heavy volume with in minutes. The next day also uptrend continues.On friday evening 14th august news about banking reforms out after market hours. THIS CLEARLY SHOWS INSIDER TRADING SOME PEOPLE KNOWS ABOUT THIS ONE DAY PRIOR TO THE ANNOIUNCEMENT.SEBI SHOULD INVESTIGATE THE PEOPLE WHO BOUGHT SHARES IN EQUITY AND F AND O SECTION AND BLOCK THE MONEY THEY MADE BY WAY OF PROFIT

Prashant

3 years ago

Pls watch related documentry. Its happening everywhere and no one is able to stop it :-

https://http://www.youtube.com/watch?v=kFQJNeQDDHA

Veeresh Malik

3 years ago

I guess an update is called for?

http://indianexpress.com/article/india/i...

""NSE cannot use defamation to gag the press: Bombay HC
A single bench of the high court said this while hearing a Rs 100-crore defamation case filed by NSE against Moneylife magazine.""

Low Latency Trader

3 years ago

It is an open secret within the industry that OP Gupta had connections within the NSE (via Jagdish Joshi) to get the faster tick-by-tick feeds.

Any other algo player looking to get into the space was at a severe disadvantage.

Incomebuilder

3 years ago

You also need to investigate the dividend stripping that the mutual funds facilitate for large corporates in connivance with big institutional distributors.
Just look at all the mutual funds which have declared dividend in March end and the corresponding spike in AUM three months prior.
Best of the so called ethical fund houses indulge in these activities every year. Just by stopping bonus option AMFI has tried to prevent bonus stripping but what about dividend stripping which has resulted in loss of revenue to govt and unfair advantage to select few.

Sunil Krishnan

3 years ago

Will SEBI pursue the matter seriously to prove / disprove the details offered and beyond? Will authorities at NSE be held accountable if the account given in the letter is proved? What was the extent of profiteering from such trades? What has NSE done after it hushed up the case to make its systems foolproof? Will all those who were a part of this be pursued for financial crimes? Do our trading systems really offer a level playing field to market participants? Sunil Sivaramakrishnan

shivkumar

3 years ago

Kudos Sucheta, only you can expose the nefarious activities of a "reputed body" like the NSE.

More strength to your Pen.

Ashok Visvanathan

3 years ago

Once you login first to a server , you stay first in the list till the end of day. The nse can every 10 minutes or so rotate the priority list at each server, so that any advantage a person has will be only for 10 minutes and they wont know when their 10 minutes is coming.

manoharlalsharma

3 years ago

Trics to profit r BUZZ word / GAME played to attract lay investors is a conman practice in all the INDIAN markets.

Deepak vohra

3 years ago

Yes, this may be going on. I am a trader from last 17 years, many times it seems that there is manipulations in rates with help of technology. Even many times there are bulk of buyers N sellers stand for long time but ur trade will not happen and interestingly heavy volume generation is going on. The last experience was fortis when stock hit for freeze and our screen showing rates 3 to 4% down. And next day we come to know Mr. Jhunjhunwala bought big quantity, that was 11 feb may be...

Suketu Shah

3 years ago

Great article.Once again if it was not for moneylife we would never know.Well done.

Sairam Sriram

3 years ago

Quite a bunch of garbage here. Looks like some one from outside of HFT firm has written this article as well as pdf.

There is literally no way to implement what is being said unless someone has done this via programming code. TCP or Multicast, as far as I know, variation has always been in NSE and all other exchanges.

Looks like the HFT firm was a beginner in doing low latency stuff - couldn't crack basic low latency TCP. I also recommend reading Richard Stevens.

REPLY

Debashis Basu

In Reply to Sairam Sriram 1 month ago

Hey I was just curious. What do you recommend now? In case, you have not been living in Mars :))

Nifty, Sensex headed higher - Thursday closing Report
As long as Nifty stays above 8,140, the upmove would continue
 
We had mentioned in Wednesday’s report that Nifty was on an uptrend and it must close above 8,050 to avoid a downmove. This morning, Nifty made an early surge and maintained its upmove throughout the day. It closed near the day’s high. 
 
 
Finance minister Arun Jaitley has assured global investors that efforts are being made to reduce their concerns on expediting reform process, tax regime and policy stability by the Narendra Modi government. Jaitley, who began his 10-day trip to the US on Wednesday, met investors and said while there is "a lot of excitement and a lot of buzz" about India, there are concerns about the pace of reform process and policy stability also.
 
As a shot in the arm for Cairn India, its partner Oil and Natural Gas Corp has asked the government to extend the tenure of prolific Rajasthan oil block by 10 years without any changes in terms and conditions. Cairn, which holds 30% interest in the Rajasthan block, wants to retain the Rajasthan block beyond the contractual deadline of 2020. And for such an extension the nod of the state-owned firm, which is a licence of the block holding 30% interest, was necessary. ONGC has agreed to the Cairn proposal and written to the Oil Ministry saying the licence term should be extended by 10 years on the existing terms and conditions, a top official said. Unlike in 2011, when it had given conditional approval for Cairn being acquired by Vedanta Group to resolve the royalty dispute, ONGC has not put any pre-condition this time.
 
Orchid Chemicals & Pharmaceuticals’ shares surged after the drug firm received the nod from the US health regulator for generic anti-bacterial Gemifloxacin Mesylate tablets. The share price closed at Rs56.70, up 14.89%.
 
Fitch Ratings does not expect India to increase customs duties on steel imports to alleviate much of the pressure on steel producers, which have been challenged by cheap imports and weak domestic demand. Higher customs duties will result in only a marginal increase (between Rs500-Rs1,100 a tonne) in the landed costs of imported steel products, which in the short term will help close the gap between domestic output and the cheaper imports. 
 
Among top gainers of the NSE Nifty stocks, Reliance Industries closed 5.25% higher at Rs980.05. Among top losers of the NSE Nifty stocks, Zee Limited closed 1.67% lower at Rs345.25. 
 
Among BSE Sensex top gainers, Reliance Industries closed 5.41% higher at Rs981.45. The top loser was Coal India, which was down 0.92% to close at Rs394.10. Among BSE-100 top gainers, IOC closed 6.31% higher at Rs374.15 and among losers, Adani Power 6.46% lower at Rs27.50.
 
Among US indices, NASDAQ Composite closed at 5,064.88, up 0.18%. Dow Jones closed at 17,935.74, up 0.17%. In Asia, Nikkei closed at 19,990.82, down 1.13%. Hang Seng closed at 26,694.66, down 0.22%. Among European indices, FTSE 100 was down 0.21% and at 6,666.83. Athex Composite Share Price Index was down 0.20% at 679.51. US Index futures were in the green. 
 

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Nifty, Sensex still on an uptrend; Bank Nifty is weak - Wednesday closing report
A close below 8,050 will mean a small downside for Nifty
 
We had mentioned in Tuesday's report that the NSE’s CNX Nifty may move further higher however for this, the 50-stock index has to stay above 8,020. The benchmark opened Wednesday higher however it started moving lower. After reaching ear previous day's close, Nifty started moving in a range. After 1.21pm, the 50-stock benchmark gained momentum and moved up to hit a four day (including today) high. After hitting the day's high, Nifty made a quick plunge and closed near to the dip it made.
 
 
India Vix value for the day was 16.73, down 2.56%. NSE turnover was at 72.97 crore.
 
Greece’s central bank warned Wednesday that failure to clinch a deal with international creditors on its future funding needs could lead the country into an “uncontrollable crisis,” describing the issue as being of historical significance for the nation. The Bank of Greece’s report amounts to an appeal to Greece’s government and its international creditors to overcome the differences between them, which the bank suggests are not unbridgeable in terms of the fiscal numbers. But the conflict between Greece’s government and its lenders has become politically charged, with both sides deeply mistrustful of the other and neither willing to give ground.
 
Glenmark Pharmaceuticals shares surged over 5.09% to close at Rs971.10 on Wednesday on hopes of revival in the US business. According to market analysts, recovery in the company's business in the States is on the cards given it has received four approvals from the US Food and Drug Administration (FDA) in the past month for its Rufinamide, Desmopressin, Calcipotriene and Levonorgestrel drugs. 
 
Finance Minister Arun Jaitley will hold meetings with foreign institutional investors (FIIs) and select top chief executives of American financial companies during his nine-day visit to the US.  On Tuesday, Jaitley left for a nine-day visit to the US, the Finance Ministry said in a statement. After reaching New York on Wednesday, he will hold luncheon meeting with executives of top US companies. Jaitley will also address portfolio managers from FIIs as well as executives of US companies operational in India, comprising banks, insurance and pension funds, the statement said. "He will hold meetings (on June 18) with USIBC and FICCI executives and would discuss about reform measures put in place by the Government of India to make India a top investment destination," said the statement.
 
Nestle India said it's investigating the complaint of live beetles reportedly found in a baby milk food supplement produced by it and is fully cooperating with the authorities on the matter. "We are aware that a consumer in Coimbatore has reported insects in a pack of our Cerelac Stage 3, infant cereal. The quality and safety of our products are non-negotiable priorities for our company and we always take such reports seriously," a Nestle India spokesperson was quoted as saying in media reports. Nestle's popular Maggi noodle has been banned by food safety regulator FSSAI due to presence of lead and taste enhancer monosodium glutamate (MSG) beyond permissible limits. 
 
Among BSE Sensex top gainers, Cipla was up 3.85% to close at Rs612.95. Vedanta was the top loser, which was down 3.14% to close at Rs173. Among BSE 100 top gainers, Glenmark was up 5.09% to close at Rs971.10. Vedanta was the top loser, which was down 3.14% to close at Rs173. Among Nifty stocks, the top gainer was CIPLA, which was up 4.11% to close at Rs612.90. Vedanta was the top loser, which was down 3.47% to close at Rs172.30.
 
Among US indices, NASDAQ 100 was up 0.52% to close at 4,455.90 and NASDAQ Composite was up 0.51% to close at 5,055.55.  
 
In Asia, Shanghai Composite was up 1.65% to close at 4,967.90 and Hang Seng was up 0.70% to close at 26,753.79. 
 
Among European indices, FTSE 100 was down 0.51% while Athex Composite Share Price Index was down 1.15%. US futures were flat.
 

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