The government is looking into whether SEBI had taken adequate steps in the National Stock Exchange co-location case, said Union Finance Minister Nirmala Sitharaman to The Economic Times.
The government is in the process of examining whether the Securities and Exchange Board of India (SEBI) took adequate steps in the National Stock Exchange co-location case, said Union Finance Minister Nirmala Sitharaman to The Economic Times.
Sitharaman said that the NSE is a classic example of "absolutely opaque, discretion-based decision making, beyond the realm of law and governance".
The statements from Sitharaman in her interview to ET marked the first public comments from the Centre on the matter.
When asked about further strengthening regulatory and statutory bodies, Sitharaman replied that the question was whether the SEBI was able to handle the situation in an adequate manner with its wide ranging powers.
"And my worry is that the perception outside is probably that they have not. I'm not saying it's my view. I need to see it," she said.
Sitharaman added that the government did not wish to see nor would it tolerate the weakened perception of investors over the credibility and transparency of processes in large financial institutions.
She clarified that the government would not take any measures which would dilute the strength of the market regulator or even weaken it. Any other moves that may weaken the credibility or image of institutions like the NSE would also not be taken.
Certain brokers are said to have benefitted from preferential access on NSE's trading platform between 2010 and 2015. The traders were able to access the trading platforms faster and earlier through the use of co-located servers that were installed on NSE's premises. These servers essentially worked as backups but were being regularly used even when the primary servers were functioning. The controversy first came to light in January 2015 through a whistleblower's mail.