The Enforcement Directorate (ED) is conducting searches at brokers’ offices in Delhi and Gurugram in connection with the National Stock Exchange (NSE) co-location scam, sources told CNBC-TV18 on Friday.
Nearly a dozen premises have been covered in this search regarding the irregularities at NSE’s co-location facility, sources said.
According to a CNN-News18 report, a total of nine locations are being raided. These include premises of brokers who benefited from the NSE co-location scam
In the co-location facility offered by the NSE, brokers could place their servers within the stock exchange premises giving them faster access to the markets. The Central Bureau of Investigation (CBI) has alleged that some brokers in connivance with insiders abused the algorithm and the co-location facility to make windfall profits.
An FIR in the NSE co-location scam was registered in 2018 for the alleged commission of offences under sections 204 (destruction of document or electronic evidence) and 120B (conspiracy) of the Indian Penal Code as well as the violation of the provisions of the Information Technology Act and Prevention of Corruption Act.
ED, meanwhile, registered a case in 2018 under the Prevention of Money Laundering Act (PMLA).
CBI has already arrested NSE’s former CEO Chitra Ramakrishna and the exchange’s former group operating officer (GOO) Anand Subramanian in the case.
The federal investigating agency is probing the alleged improper dissemination of information from the computer servers of the market exchanges to the stock brokers.
Earlier, the Securities and Exchange Board of India (SEBI) penalised NSE and its former CEOs Chitra Ramakrishna and Ravi Narayan and two other officials for lapses in recruitment at the senior level.
Ravi Narain was the MD and CEO of the NSE from April 1994 till March 2013, while Chitra Ramkrishna was MD and CEO of the NSE from April 2013 to December 2016.
