The parliamentary standing committee on finance, headed by Jayant Sinha, has summoned top officials of the Securities and Exchange Board of India (SEBI). The committee may also question SEBI's new chief Madhabi Puri Buch on regulatory issues and the National Stock Exchange (NSE) co-location (Colo) scam, say reports.
The committee has advanced its meeting to Tuesday from Wednesday. It would record oral evidence of the representatives of SEBI on regulatory issues concerning the capital market, with special reference to initial public offerings (IPOs), volatility, international financial services centres (IFSC) and alternate investment fund (AIF), a notice issued by the committee director says.
Quoting sources from the committee, a report from Business Standard
, says, "…members will also question the SEBI chairperson about the recent NSE scam in which several of its top officials including former chief executive officers Chitra Ramakrishna and Ravi Narain are being investigated."
"When contacted, Mr Sinha said that Ms Puri Buch has been called by the parliamentary panel to deliberate upon the orderly functioning of the market in the recent volatility and turbulent flow of cash," the report added.
The committee is headed by Mr Sinha, former minister of state for finance, and has members like the former prime minister Dr Manmohan Singh, SS Ahluwalia, Sushil Kumar Modi, Praful Patel, Manish Tewari, Dr Amar Patnaik, Prof Sougata Ray, among others.
Quoting officials from the ministry of corporate affairs (MCA), a report from the Economic Times
says, "The standing committee has issued a notice......the panel would like know what went wrong in the case of NSE...The new chairperson herself is expected to attend the meeting and inform the panel about the development..."
Last month, finance minister Nirmala Sitharaman informed the Rajya Sabha that the Central Bureau of Investigation (CBI) investigating the colo scam at the NSE, has made substantial progress.
In a statement laid on the table, the FM says, "During the investigation in the matter, it was noticed that certain stockbrokers got preferential access to the trading system. For lapses in this regard, NSE, NSE's former chief executive officers (CEOs) and top officials have been held responsible for breaches of the relevant provisions of Securities Contracts (Regulations) (Stock Exchanges and Clearing Corporations) Regulations, 2012 and monetary penalty and other restrictions have been imposed on them."
In February last year, SEBI's adjudication officer imposed a penalty of Rs1 crore on NSE for its failure to ensure a level playing field for trading members subscribing to its tick-by-tick (TBT) data feed. NSE's former MD and CEO Ravi Narain and Chitra Ramkrishna were penalised with a fine of Rs25 lakh each.
Before that in April 2019, SEBI had ordered disgorgement of profits from NSE and salaries of former MDs, Ravi Narain and Chitra Ramkrishna. The regulator has also asked the Exchange to disgorge an amount of Rs624.89 crore along with interest calculated at the rate of 12% per annum to the Investor Education and Protection Fund (IEPF).