The ‘co-location’ controversy that had engulfed National Stock Exchange (NSE) appears to have claimed a scalp in founder-member Ravi Narain, who has quit the NSE board.
This follows the recent exit of another founder-member, Chitra Ramkrishna, erstwhile Managing Director and CEO, NSE, who quit in December 2016 citing “personal reasons”.
Narain is understood to have stepped down in the “best interest” of the NSE as he does not want to be party to the decisions of the NSE board on the ‘co-location’ matter, it is learnt.
He along with Chitra and 12 other persons had been served with show-cause notices by market regulator SEBI on the ‘co-location’ matter.
The co-location issue relates to brokers placing their servers at the exchange’s premises during 2011-14, which reduces the time for an order and provides a speed advantage over those located away from the premises.
Faster access to data feed of an exchange, even by a split second, can result in huge gains.
Narain was serving as non-executive Vice-Chairman and shareholder director of the bourse since March-end 2013. Prior to this, he was Managing Director and CEO of NSE for nearly 13 years (from November 2000).
Narain’s exit is expected to help the NSE board, which is slated to meet next week, to “freely discuss” the SEBI actions around the ‘co-location’ controversy and chart a course of action for completing its initial public offering (IPO) before the end of this calendar year, it is learnt.
“He (Narain) did not want to be seated in the NSE Board when it (SEBI’s actions on co-location controversy) is discussed. It is not a pleasant situation, as he himself has been served a show-cause notice. So in the best corporate governance tradition he has stepped down,” sources said.
IPO on track Despite the ongoing controversy around the co-location facility, NSE is “on track” to hit the market with an IPO before the end of the year, they added.
Narain, along with Ramkrishna, are among the 14 persons who had been served show-cause notices by SEBI in the “co-location” matter. Narain had played a key role in NSE’s emergence as one of the top bourses globally in the equity derivatives segment.
Vacuum at the top Narain’s resignation comes at a time when the exchange is waiting for Vikram Limaye to join it nearly four months after he was appointed Managing Director and CEO. NSE has been without a full-time CEO ever since Ramkrishna quit in December. It named Limaye, 50, MD and CEO of IDFC, as its next chief in February, but he has not been able to take charge because approval from market regulator SEBI is pending.
SEBI is yet to clear the appointment as he is part of the four-member panel formed by the Supreme Court to manage the affairs of the Board of Control for Cricket in India.
Limaye’s term at BCCI will end in August, unless the apex court extends his term.