Probe on NSE co-location glitch gathers pace

Shifts towards money trail, illicit gains; CBI grills ex-NSE GOO Anand Subramanian over abuse of co-location facility by broker

Grant of preferential server and data access to select brokers and their suspected misuse are being investigated threadbare to unveil all quid pro quo arrangements in a highly-sophisticated scheme that worked like a cricket betting scandal, said officials

New Delhi: As a multi-agency probe into the NSE case gathers pace, the grant of preferential server and data access to select brokers and their suspected misuse are being investigated threadbare to unveil all quid pro quo arrangements in a highly-sophisticated scheme that worked like a cricket betting scandal, officials said on Monday. While the bourse said it has taken several steps over the years to strengthen its technology infrastructure, including as per regulatory orders, the officials said certain fresh disclosures call for a detailed probe into whether a select group of individuals in high positions had banded together to make illicit gains by facilitating the preferential trading slots, beginning over a decade ago.

Even a split-second faster access is said to result in huge gains for a trader. The preferential access allegedly did not include just close proximity to the exchange servers, but also provided faster and 'Tick-By-Tick' (TBT) data containing minute details about all trades and orders. Explaining how the system worked, one of the senior officials said, "the best analogy to understand this highly-technical matter is cricket and betting. For a common investor or a broker trading on his or her normal terminal is like watching the live telecast of the match on television or in a stadium. But imagine your eyes and ears right behind every single player in the field, getting to know their moves and strategies on a real-time basis before anyone else," the official said.