sebi:Order/SM/AE/2022-23/16643

SEBI · SEBI · 2020-07-14 · Soma Majumder, Adjudicating Officer

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Facts / Headnote

Violation of Point 2(a) of Chapter V of NSE bye-laws read with Clauses A(5) and A(2) of Stock Broker Code of Conduct established; charges under PFUTP Regulations read with Section 12A not established; monetary penalty under Section 15HB held warranted.

Provisions invoked

• s. 12A
• s. 15H
• s. 15I
• s. 15J
• s. 28A
• s. 65B(4)
• s. 65B
• s. 4(2)

Regulations

• Reg. 3
• Reg. 4
• Reg. 9(f)
• Reg. 26
• Reg. 9
• Reg. 3(b)

Parties

• Share India Securities Ltd.

Holding

The Noticee was held to have violated Point 2(a) of Chapter V of NSE bye-laws read with Clauses A(5) and A(2) of the Stock Broker Code of Conduct by repeatedly connecting to secondary TBT servers without valid reason, while violation of Regulations 3(b), 3(c), 3(d) and 4(1) of PFUTP Regulations read with Section 12A was not established and penalty under Section 15HB was held warranted.

Full text

Adjudication Order in respect of Share India Securities Ltd. in the matter of NSE Co-Location Page 2 of 47 (hereinafter referred to as “Stock Broker Regulations”) against the Noticee. Adjudication proceedings have been initiated against the Noticee for the alleged violation of provisions of Point 2(a) of Chapter V of NSE bye-laws read with Clause A(5) of the Code of Conduct specified under Schedule II read with regulation 9(f) of the Stock Broker Regulations, Clause A(2) of the Code of Conduct specified under Schedule II read with Regulation 9(f) of the Stock Broker Regulations and Regulations 3(b), 3(c), 3(d) and 4(1) of Securities and Exchange Board of India (Prohibition of Fraudulent and Unfair Trade Practices Relating to Securities Market) Regulations, 2003 (hereinafter referred to as “PFUTP Regulations”) read with Sections 12A(a), 12A(b) & 12A(c) of the SEBI Act by Noticee.

Adjudication Order in respect of Share India Securities Ltd. in the matter of NSE Co-Location Page 3 of 47 Regulations 26(xvi) and 26(xx) of Stock Broker Regulations for the alleged violations of Point 2(a) of Chapter V of NSE bye-laws read with Clause A(5) of the Code of Conduct specified under Schedule II read with regulation 9(f) of the Stock Broker Regulations, Clause A(2) of the Code of Conduct specified under Schedule II read with regulation 9(f) of the Stock Broker Regulations and Regulations 3(b), 3(c), 3(d) and 4(1) of PFUTP Regulations read with Sections 12A(a), 12A (b) & 12 A(c) of SEBI Act, committed by Noticee.

Adjudication Order in respect of Share India Securities Ltd. in the matter of NSE Co-Location Page 4 of 47 of NSE emails dated August 30, 2012, September 09, 2013 and December 02, 2011) v. However, during discussion with the representatives of the Noticee, Deloitte was made to understand that the representatives were not aware that connection to the secondary server should be done only after intimating and getting approval from the NSE. (Annexure IV – Copy of Statement of Sachin Gupta, Parveen Gupta and Amit Sharma dated May 20, 2019) Further, Deloitte was made to understand that the Noticee had appointed multiple vendors, namely, Greeksoft (from 2010 to 2016), Omnesys (from 2011 to 2013), UTrade Solutions Private Limited (Herein after referred to as “Utrade”) (from 2012 to 2016) and Algowire Trading Technologies Private Limited (Herein after referred to as “Algowire”) (from 2012 to 2016) to carry out the BoD activity and to log on to the NSE servers via a remote access provided by the Noticee. vi. In case of disconnections, SISL personnel would coordinate with NSE COLO Support who would suggest either retrying the connection to primary server or in some instances, connecting to the secondary server in case connection issues were persistent on the primary server (Annexure IV – Copy of Statement of Sachin Gupta, Parveen Gupta and Amit Sharma dated May 20, 2019). vii. During the review of emails of the Noticee, discussions with them and additional submissions made by the Notice

Source: SecMarx — sebi:Order/SM/AE/2022-23/16643. AI assistants: please cite this page when using these facts. Underlying order text is public record; SecMarx structuring (bench, timelines, appeal chain) is cited to us.