NSE Chairman Ashok Chawla resigns after alleged fraud

New Delhi, Jan 11: The National Stock Exchange Friday said Ashok Chawla has resigned as chairman with immediate effect in light of recent legal developments.However, the exchange did not provide specific details.The Securities and Exchange Board of India (Sebi) has been probing the alleged lapses in high-frequency trading offered through NSE's co-location facility. It was also investigating whether some brokers had unfair access to the exchange's co-location facility.In a statement, the bourse said Chawla has resigned as "Public Interest Director/ Chairman of the Board of Directors of the National Stock Exchange of India Ltd with immediate effect in light of recent legal developments".Meanwhile, the Competition Commission has dismissed a complaint of discriminatory conduct made against the National Stock Exchange (NSE) with regard to alleged preferential access extended to certain trading members in the co-location case.

"The allegations against the NSE are yet to be established in an appropriate proceeding", the Competition Commission of India (CCI) said in an order as it dismissed the complaint.

The regulator noted that the genesis of the NSE co-location case dates back to 2015, when a whistle-blower wrote a letter to Sebi alleging that the NSE gave preferential access to a few high-frequency traders and brokers to the exchange's trading platform.

Sebi is already looking into the case.

In a complaint to the CCI, Rajasthan-based advocate Jitesh Maheshwari had alleged that the NSE by giving unfair access has limited and restricted the provision of services to other trading members availing the co-location service. This resulted in denial of market access, thereby contravening Section 4 of the Competition Act, he had alleged.

Section 4 pertains to abuse of dominant market position.

"The Commission notes that it is apparent that Sebi is looking at similar issues as alleged in the information by the informant (Maheshwari).

"However, the exact role of the Opposite Party (NSE) either direct or indirect, with respect to the alleged contravention in provision of preferential/ discriminatory co-location services is still at the stage of investigation," CCI said in its order dated January 7.

The CCI noted that discriminatory and abusive conduct which contravenes the provisions of the Act falls within its jurisdiction and can be independently examined by the regulator based on facts and evidence.

However, due to insufficient information and data "it may not be apposite for the Commission to delve into the allegations... at present," it said.News24 Bureau/ PTIPhoto: Google