INSUBCONTINENT EXCLUSIVE:
Co-location facilities are dedicated spaces leased by a third party for trading purposesWith the arrest of former National stock exchange
managing director and CEO Chitra Ramkrishna in a co-location scam case on March 6 by the Central Bureau of Investigation (CBI), the focus
probe by CBI against a Delhi-based stockbroker.The central agency's probe received a shot in the arm after market regulator Securities and
Exchange Board of India (SEBI) released a report indicating alleged misuse of power by the top management of NSE in the matter.According to
issue, let us try and understand what exactly are co-location facilities and what is the scam all about.Co-location FacilitiesCo-location
high-frequency as well as other trading processes.Traders can rent such spaces and set up their systems or programmes to indulge in trading
activities.NSE started co-location services in August 2009, where due to the close proximity to stock exchange servers, traders got faster
earlier than others and execute trade faster, thus resulting in profits for them
Also, since the charge for these services was high, only big brokers could afford to rent such a space.What is the NSE co-location scam?In
the entire episode, it has been alleged that some brokers in connivance with insiders, took advantage of the fact that NSE provided data on
first come first serve basis for making handsome profits.In other words, the trader who logged in to the NSE server first, would get access
to information like buying or selling as well as cancellation of orders, compared to others who logged on to the server later.This is called
server, unlike a broadcast where everyone gets the price information at the same time.Brokers at the co-location facility are given details
of the servers and the ports to which they could connect to access the price feeds.A whistleblower in the case alleged that OPG Securities,
with help from some officials in NSE's IT department was able to figure out which server had the least load so that they could get
connected to the NSE server faster
the ex group operating officer of the NSE, to fourteen days judicial custody, in connection with the co-location scam case.Mr Subramanian
was arrested by the CBI on February 24.The CBI official produced him before the court of Sanjeev Aggarwal on Wednesday
The federal probe agency moved a plea before the court saying he wasn't required for further questioning and requested the court to send him
The court allowed the move of the CBI and remanded Subramanian to fourteen days of judicial custody
He will now be lodged at Tihar Jail.Recently, SEBI had imposed a fine of Rs 3 crore on her, following the market regulator finding that she
