NSE Algo Scam: Is SEBI’s Shoddy Investigation Designed To Hide Its Own Incompetence?
A growing clamour and pressure from influential quarters for the capital market regulator to wind up the algo-trading scandal at the National Stock Exchange (NSE) may have been put on pause by a timely public interest litigation (PIL) filed in the Madras High Court. 
 
This PIL asks for very specific action against NSE’s entrenched top management, which had, over two decades of absolute control, converted the Exchange into a private club that ran roughshod over competition and retained its near-monopoly through the regulatory capture of SEBI (Securities and Exchange Board of India) and the finance ministry.
 
The PIL, and the investigation launched by the Central investigation agencies, are the only developments that seem to stand in the way of SEBI burying the issue with a consent order and continuing to allow the Exchange to function without forcing better transparency or accountability. 
 
Is it possible that SEBI is in a hurry to close the matter because digging deeper would expose its own inaction over the years that led to NSE’s extraordinary arrogance? 
 
Two weeks ago, I wrote that SEBI’s 1500-page show-cause notice (only the 2nd set)...
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COMMENTS

jaideep shirali

3 weeks ago

Whether SEBI or NSE, it seems that top executives have all the power to feather their own nests, but no accountability. For a start, the entire Board of SEBI and NSE should be disqualified permanently from being Directors of any public entity. This may sound harsh, because some of them have excellent records otherwise, but they have been silent abettors to the crime on society and capital market participants in particular. I see SEBI for example, hairsplitting in the mutual fund industry, but comatose about the retail debt markets, the delisting of thousands of small listed companies and rampant penny stock manipulation. NSE is noted for its arrogance towards capital market players and investors, an attitude that permeated downwards from its top. Maybe it is time that we stripped the NSE of some of its trading segments and revived some other stock exchanges, then NSE may start behaving itself. And nobody is too big to be punished, in fact the severest punishment is what these people deserve. One can read "Den of Thieves", to understand how the culprits behind the US junk bond manipulations were punished, with fines and jail terms.

A. Pereira

3 weeks ago

Corruption is ingrained in the blood of all these rogues, from political leaders, babus and these top officials. They have no limit to their greed. They are encouraged by the sloppy judicial infrastructure in the country that wont decide cases for decades (remember Sucheta's fight against Harshad Mehta?), and even at that time, if the rogue is still alive, he will be helped by some influential political master for a share in the loot. People elect reps, who forget the vote the moment they enter legislatures, and then on, people continue to suffer through thier enormous number of laws, which show no teeth to bite this VIP rogues. The so called autonomous bodies and regulators are controlled by the govts all through the years, and they serve only those have money n influence. Occasionally, the Supreme Court comes to the rescue, but even there, there is delay even where there is urgency of governance issue affecting the public (see how long it is taking to get a hearing in the Delhi Govt vs LG power control over Services case, whereas it had time to decide on Priya's winking eye case!)
Fight by institutions of integrity like Moneylife continues in the meantime. All that we can do is to support them morally and financially to take up the fight on behalf of the common man. Please continue your good work, MoneyLife, Ms Dalal, Mr Basu & team. Kudos to you all.

Dayananda Kamath

3 weeks ago

Sebi also should be made as accused in this PIL. SEBI has failed in its duty.
I have a simple case aditya birla money is still showing varun shipping as my holdings instead of demerged varun resources and varun global where as in my other demat account the change is reflected. Broker, depository, CDSL, as well as Sebi are least bothered to look into it inspire of reporting to them so many times. If your account can not show the true picture how can you trust all these authorities and regulator and their standards.

Nitin

3 weeks ago

Sebi is more interested in making life of traders/investors difficult through ridiculous policies like increasing derivatives lot sizes , networth based investing exposure and caps on mutual fund fees. The big fish like NSE and the Vakrangees go scot free

Ranjith Mp

3 weeks ago

Lobbying has increased in country, I don't want to be a lobbyist

Ranjith Mp

3 weeks ago

Dear moneylife team, I ran a franchise of stock brokerage firm in past(2008-2017)company merged with a foreign bank, politics become severe in company, they wanted me to do dirty work for them so i wind up firm, I got no assistance from sebi, & nse assistance was given by my lawyer, these agencies are all paper tags, if we want to improve in ease of doing biz index we must chop of hands of corrupt people like in gulf countries (my personal opinion)

Algo Scam: NSE Gave 'Special Treatment' to Ajay Shah While Providing Confidential and Sensitive Data, Reveals Lok Sabha Reply Based on SEBI Inputs
Ajay Shah of the National Institute of Public Finance and Policy (NIPFP) was given 'special treatment' by the National Stock Exchange (NSE) in gaining access to confidential and sensitive data without a formal agreement and data use contract, reveals a reply in the Lok Sabha which is based on inputs from the market regulator.
 
Pon Radhakrishnan, the minister of state for finance said this in response to a question by Dr Kirit Somaiya. He said, "Securities & Exchange Board of India (SEBI) examination, inter alia, observed that the professor had employed a device/ scheme/ artifice, wherein the confidential and sensitive data provided by NSE was misused in fraudulent manner, which resulted in compromising the integrity of the securities market."
 
 
After completing its investigation, the market regulator had initiated enforcement proceedings against various entities and persons including Mr Shah, the reply says. Ironically, the finance ministry has been working closely with Prof Shah and the NIPFP. 
 
He has also been involved with several key committees to frame market regulation including Financial Legislative Reforms Commission (FSLRC). He...
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Was the Minister given Incomplete Information Relating to PwC?
Recently the Punjab and Haryana High Court has issued a notice to a retired state information commissioner who allegedly sat over a judgement for more than three years. The matter pertained to an appeal seeking information under the Right to Information Act (RTI Act) from Chaudhary Devi Lal University at Sirsa.
 
This is not a one-off case. Information sought under the RTI Act is invariably delayed on one pretext or the other, often, in blatant violation of the RTI Act. 
 
Sometimes, a denial could expose something far more critical: that the information provided even to the highest functionaries in the government is not thoroughly scrutinised.
 
Proceedings in the Lok Sabha
 
Poonam Mahajan and Tej Pratap Singh Yadav, members of Parliament (MP) had in 2017, raised certain questions in the Lok Sabha. One specific query of the MPs was “whether the Government has taken cognizance of several instances of violations by auditors PricewaterhouseCoopers (PwC) and its partner firms over the last ten years that pose serious threats to public interest and national security.”
 
Arjun Meghwal, minister of state, ministry of corporate affairs...
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COMMENTS

A. Pereira

3 weeks ago

RTI was the result of extreme hard work by activists in the first decade of this Millennium. It was perhaps reluctantly agreed to be passed as law by the then Manmohan Singh govt. As we are seeing in the later law of Lokpal, which MMS govt reluctantly passed, and the current Modi govt is showing no will to implement it (appointment of the Lokpal is pending for all these years, despite all the drama enacted by all political parties, including the congress and the BJP, in parliament, with some ministers even shedding crocodile tears for Anna Hazare). All these political parties (barring one in power in the smallest state but most important UT) have no desire to expose their sins to the public, so until the public do not wake up, the loot will continue. Till then, for the common man, once in the hot oil, once into the fire. Switching between the same parties does not solve any problems as both elements prove being two faces of the same coin.

REPLY

Manoj Kapur

In Reply to A. Pereira 3 weeks ago

I agree with you completely. Both parties have weekened the efforts towards transparency in every possible way. The rot is deep and requires disruption in form and substance

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