Coronavirus impact: NSE allows brokers to move trading terminals home

In a bid to allow stockbrokers to work remotely, the National Stock Exchange (NSE) has allowed relocation of trading terminals to locations other than those authorised. In a circular titled “operational business continuity measures Covid-19”, the exchange said in view of the coronavirus pandemic trading members will have the option of relocating their trading infrastructure subject to conditions.

The exchange has asked broking houses to frame an internal policy to stating proper monitoring and controls to prevent unauthorised trading activity. Further, brokerages will have to provide details of users who will be permitted to operate from remote locations. The brokerages will be responsible to ensure that only approved users get access to terminals.

“Before operation of terminals from the alternate locations, provide the list of the approved users, terminal details, segment, certificate details and the alternate location address to the exchange,” NSE said.

Under the existing policy, a trading terminal can only be operated from the main office or branches. Also, brokers have to display Sebi registration certificate on their notice board.

The exchange has as a temporary measure these requirements stand relaxed till April 30 following which “the terminals shall be operated only from the locations reported to the exchange.”

NSE has said the internal policy for working from alternative locations will have to be approved by a senior authority such as CEO, director or compliance officer.

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Meanwhile, NSE has also issued a ‘work from home advisory’ for its employees. Sources say it has divided its employees into two categories—those who can from work from home and those who need to come to the exchange premises.

On Friday, the Maharashtra government ordered the closure of all working place in Mumbai, Pune, Pimpri Chinchwad and Nagpur till March 31. The state government, however, said the directive will not be applicable to stock market ecosystem.

“Stock exchanges, clearing corporations, depositories, stockbrokers and Sebi-registered participants operating through these institutions will be exempted,” Chief Minister of Maharashtra Uddhav Thackeray tweeted on Friday.

Globally exchanges and regulatory authorities are grappling with keeping stock markets functioning in the wake of the coronavirus outbreak.

The US Securities and Exchange Commission has announced that it has transitioned to a “full telework posture” in response to the outbreak.

IIT prof among new members on NSE board, Mohandas Pai and two others exit

The National Stock Exchange of India (NSE) has inducted S. Sudarshan, professor, IIT Bombay and K Narasimha Murthy, partner of Narasimha Murthy & Co-Cost Accountants, Hyderabad on its board. Both join as public interest directors (PIDs).

Meanwhile, Naved Masood, former secretary in the Ministry of Corporate Affairs and Sebi board member; TV Mohandas Pai, chairman of Manipal Global Education and Dinesh Kanabar, CEO, Dhruva Advisors have ceded their position on the NSE board following end of their tenure.

Currently, the country’s largest bourse has eight board members, which includes four PIDs and three shareholders.

Under Sebi regulations, at least a fourth of an exchange's board should consist of PIDs.

Girish Chandra Chaturvedi, former petroleum secretary is the chairman of the board. Chaturvedi and former State Bank of India (SBI) deputy managing director Anuradha Rao had joined as PIDs late last year.

These directors are tasked with upholding the governance standards at stock exchanges and other market infrastructure institutions.

Also, the initial tenure of PIDs has been lowered to three years and an extension is subject to performance review by Sebi.

Prakash Parthasarathy of former CIO PremjiInvest; Abhay Havaldar, former advisory director General Atlantic and Sunita Sharma former MD of LIC Housing Finance are three shareholder directors.

Barring two members, the NSE board’s complexion has undergone a complete change in the past one year.

The exchange’s board has key role to play as the exchange is eager to launch its initial public offering (IPO).

Before NSE would like to settle the matter concerning unfair access given to certain brokers. The Securities and Appellate Tribunal (SAT) is currently hearing an appeal filed by NSE against an order a Sebi order directing it to disgorge Rs 1,000-crore for lapses at its co-location facility. The tribunal is likely to hear the matter next in mid-April.

Former petroleum secretary Girish Chaturvedi in line for NSE top job

The National Stock Exchange (NSE) has inducted former petroleum secretary Girish Chandra Chaturvedi and State Bank of India (SBI) former deputy managing director Anuradha Rao into its board as public interest directors (PIDs).

Sources say Chaturvedi, who is a 1977-batch IAS officer, could even fill the chairman’s post, which is lying vacant since January. This comes as Ashok Chawla stepped down after the Central Bureau of Investigation (CBI) was granted sanction to prosecute him in the Aircel-Maxis case.

The appointments were approved by the NSE board at its meeting held earlier this week, said people in the know. Sources said the NSE, after furt­h­er deliberations with other board me­m­bers and stakeholders, could prop­o­se the name of Chaturvedi for the ch­airman’s post. The appointment will have to be ratified by the Secur­i­t­ies and Exchange Board of India (Sebi).

Fresh appointments are crucial for the exchange which is looking to go public and bury the ghost of the unfair access controversy.

Getting PIDs on board has become challenging for market infrastructure institutions (MIIs), which are stock exchanges, clearing corporations and depositories, after market regulator Sebi, in February, issued a stricter framework for their appointment and performance review. Under the new norms, the initial tenure of PIDs can be only three years and an extension is subject to performance review by Sebi.

At least a fourth of the board of an exchange should comprise PIDs, who are responsible for upholding the governance standards at MIIs. Sources said the new appointments on the NSE board have been approved and vetted by Sebi.

If Chaturvedi is appointed chairman, he will be the second bureaucrat to head the NSE board after Chawla. Industry players said it helps to have a civil servant as the chairman of an exchange.

“An exchange, being one of the most critical parts of the market ecosystem, has to deal with various stakeholders such as Sebi, the RBI (Reserve Bank of India), the finance ministry and brokers. It is important to have an official at the helm who is experienced in dealing with these stakeholders,” said an industry participant.

Chaturvedi and Chawla both have a civil services link. Currently, Chaturvedi is the non-executive chairman of ICICI Bank. While Chawla was the NSE chairman, he too served on the board of private sector lender YES Bank as non-executive chairman.

Chawla, who had served as the chief of Competition Commission of India (CCI), had joined the exchange at the peak of the unfair access controversy amid several probes at the exchange and on its officials.

In May, Sebi passed an order in the unfair access matter, where it directed NSE to disgorge Rs 625 crore, along with interest at 12 per cent per annum since 2014, for lapses at its co-location (colo) facility, which allowed unfair access to certain brokers. The regulator also barred the exchange for a period of six months from accessing the securities market.

The exchange has challenged the order at the Securities Appellate Tribunal (SAT). The exchange will proceed with its IPO, which has been held back for three years, after the tribunal gives its verdict.

Sebi bars NSE from capital markets for 6 months in co-location scam

The market regulator said on Tuesday the National Stock Exchange (NSE) did not exercise due diligence when putting in place a network that allowed high frequency traders unfair access to some network servers at the exchange.

The Securities and Exchange Board of India (Sebi) barred the NSE from raising money on the securities market directly or indirectly for six months.

Sebi has been investigating allegations that NSE officials provided high frequency traders unfair access through co-location servers placed at the site of exchange, which could speed up algorithmic trading.

It asked two former NSE chief executive officers, Ravi Narain and Chitra Ramkrishna, to "disgorge" 25 per cent of their salaries drawn during a certain period.

Narain and Ramkrishna have been prohibited from "associating with a listed company or a Market Infrastructure Institution or any other market intermediary for a period of five years," Sebi said in a 104-page order.

NSE was asked to pay within 45 days about Rs 624.89 crore with an interest rate of 12 per cent a year effective from April 2014 to the Investor Protection and Education Fund.