Future course of action after studying Sebi order: NSE chief

Future course of action after studying Sebi order: NSE chief

“We are currently examining the order,” Limaye told IANS.

To a specific question, whether NSE would challenge the Sebi order, he said: “The order has come just last (Tuesday) evening. Our lawyers are still examining the order. We have different options. Once we get appropriate advice from lawyers and we discuss within the board, then we will decide our future course of action.”

Limaye also asserted that the order will have no bearing on its businesses even during the ensuing six months period.

Asked if NSE will be calling a board meeting to discuss its legal team’s advice on this, he said: “We already have a board meeting scheduled for our year-end results .We will discuss the Sebi order and the legal advice in the meeting.”

With regard to action against some of the employees (ex CEOs) of the NSE who have been indicted in the Sebi report, he said that the exchange would wait for legal advice, which is expected within the next 15 days.

“There are two aspects to it. There are employees who have been represented by an independent counsel and they will have to decide on what course of action they want to take on the basis of the order and what options are available to them. We are also getting appropriate legal advice on the institutional matter and the employee issues. Once we have that advice, we will discuss in the board for appropriate action, we will have to decide on course of action very soon,” he said.

The NSE MD & CEO said the implied meaning of the order on its proposed IPO is that the fund raising has to wait for another six months.

“The order says that we can not tap the public market for the next six months which is an indication of the timeline of the IPO… which will obviously mean that we have to wait for six months,” he said.

Limaye also clarified there is no bar on launching new products on the Gift City exchange and that the Sebi order only prohibits launching new derivatives products in the domestic market.

“There is no bar on Gift City which is a separate exchange and is regulated separately. This order is on NSE. And we are free to launch any new products on NSE Gift City.”

The NSE chief also said the Sebi order will have no bearing on the existing trading, business and on investors and the issue of co-location is more related to technology, control and processes during the period 2010-14.

“This order has no implication on the functioning on NSE, or functioning of market or on any segment of the NSE so everything will continue as normal. There will be no disruption to the investors. The depth of the NSE and the Indian markets are well established and that will continue.

“This is only a resolution of a matter that was pending for the last 7-8 years. The Sebi order has no bearing on the NSE as an exchange or on any segment. Trading will continue as normal. It is a matter relating to a historical issue and has got no implications on NSE functioning or business except for two restrictions for six months and there will be no new derivative products for six months. All the existing products and indices will continue,” he said.

In a volume of five orders issued on Tuesday, Sebi asked the NSE to “disgorge” its profits from co-location worth Rs 624.89 crore at 12 per cent interest to the Investor Protection and Education Fund (IPEF). The amount with interest would add up to about Rs 1,000 crore.

The Sebi has also penalised NSE’s two former CEOs and founding members Ravi Narain and Chitra Ramakrishna. Narain, who was heading the exchange between 2010 and 2013, was asked to deposit 25 per cent of his salary for the three fiscals in IPEF, while Ramakrishna, who was the CEO of the exchange starting fiscal 2014, must deposit 25 per cent of her salary for that fiscal. She stepped down as CEO in December 2016.

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