Capital markets regulator SEBI on Tuesday imposed a penalty of Rs 3 lakh on Yug Securities for flouting norms related to National Stock Exchange's co-location facility. The order comes after SEBI received multiple complaints against the broker, pertaining to allegations of malpractices with respect to the co-location facility provided by NSE.
In the wake of allegations of preferential access to Tick-by-Tick data feed given by NSE to certain trading members, the matter was taken up for investigation by SEBI. Yug Securities was one of the trading members identified for comprehensive investigation (including forensic audit) for primary and secondary server connects.
The stock broker logged into secondary server in cash market segment during 2013-2014, according to SEBI orders. According to NSE's co-location guidelines, secondary source for TBT (Tick-by-Tick) data is to be used in the event of non-availability of TBT primary source and trading members should not routinely connect to the secondary server.
Further, as per the available records, NSE advised the stock broker not to connect to the secondary server. However, the broker continued to connect to the secondary server, it added. Yug Securities connected frequently to the secondary server which was in violation of the NSE co-location guidelines, thereby also failing to exercise due skill care and diligence in conducting its trading operations, SEBI said. Through such acts, Yug Securities flouted the provisions of NSE bye-laws and code of conduct specified under Stock Broker regulations.
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