NSE co-location scam may top SEBI board agenda on June 21

The NSE’s co-location scam is likely to top the agenda of SEBI’s board meeting on June 21.

A final probe report of the investigation conducted by SEBI’s internal team on alleged unfair access provided by the NSE to certain brokers is ready and will be tabled on June 21, a source close to the development told BusinessLine . SEBI may submit its final probe report, along with previous investigation reports by the Technical Advisory Committee (TAC) set up in 2016 to probe the matter, as well as findings of consulting firms Deloitte and E&Y.

Prima facie there are two questions that SEBI has looked at — first, if there was any case of systemic lapse at the NSE, and the second, who colluded and benefited from it. While systemic lapse was established by previous probes, including by the TAC, the final report now will throw light on who mainly benefited from the manipulation.

SEBI, mainly based on information provided by the Income Tax Department and other agencies, has also studied the ownership pattern of companies linked to the NSE and even those holding a stake in it to find out if there is any credence to the allegation of a former Union Minister and his son having financial interest in the exchange, which, if found mention in the report, could kick-start a political storm.

Gandhi panel report

Among other matters that are part of the SEBI board meet agenda are review of the second report submitted by a panel headed by former Governor of RBI, R Gandhi. The committee, which gave its report to SEBI on April 25, was tasked to consider whether registrar and transfer agenda could be classified as market infrastructure institutions (MIIs) such as stock exchanges, clearing corporations and depository participants, which face ownership restrictions.

Also, the committee gave its recommendations with regard to credit rating agencies and how they should set up an independent body to deal with appeals in case of dispute over ratings. The Gandhi Committee’s first report, which was submitted last year, was on the way forward for stock exchanges, depositories and clearing corporations.

The SEBI board would also be appraised about the changes and review of ICDR (Issue of Capital and Disclosure Requirements) (Amendment) Regulations, 2018, carried out by the regulator.