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Consider the following statements:
1. SEBI recently imposed a penalty of Rs 1 crore on the National Stock Exchange (NSE) in connection with its three-year investigation in the co-location case.
2. Currently, NSE used to disseminate price information through a unicast system.
Which of the statements given above is/are correct?
  • a)
    1 only
  • b)
    2 only
  • c)
    Both 1 and 2
  • d)
    Neither 1 nor 2
Correct answer is option 'A'. Can you explain this answer?
Verified Answer
Consider the following statements:1. SEBI recently imposed a penalty o...
Capital market regulator Securities and Exchange Board of India (SEBI) imposed a penalty of Rs 1 crore on the National Stock Exchange (NSE) in connection with its three-year investigation in the co-location case.
  • The NSE is facing allegations that some brokers got preferential access through the co-location facility at the stock exchange, early login, and ‘dark fibre’, which can allow a trader a split-second faster access to the data feed of an exchange.
  • Even this infinitesimally sooner access is considered to result in huge gains for a trader.
  • Few brokers were able to log into the NSE systems with better hardware specifications while engaged in algorithmic trading, which allowed them unfair access and advantages.
  • The unfair access issue pertains to 2012-14 when NSE used to disseminate price information through a unicast system. In such system, information is disseminated to one member after another.
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Consider the following statements:1. SEBI recently imposed a penalty of Rs 1 crore on the National Stock Exchange (NSE) in connection with its three-year investigation in the co-location case.2. Currently, NSE used to disseminate price information through a unicast system.Which of the statements given above is/are correct?a)1 onlyb)2 onlyc)Both 1 and 2d)Neither 1 nor 2Correct answer is option 'A'. Can you explain this answer?
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