CHENNAI : A writ plea has been made in the HC for a directive to the Securities Exchange Board of India (SEBI) to take action against the employees of National Stock Exchange (NSE) for the alleged fraud in the ‘colocation service’, which allegedly resulted in loss to the tune of crores to customers.
Justice T Raja, before whom the writ petition from advocate A Kumar came up for hearing last week, ordered notice to SEBI, returnable in two weeks. A colocation service is a data centre facility in which a business house can rent space for servers and other computing hardware.NSE introduced the facility of managed colocation service, which was named ‘Colocation as a Service’ (CaaS), to facilitate small and medium size members, who otherwise would find it difficult to avail the facility due to various reasons including high cost, lack of expertise in maintenance and troubleshooting.
Petitioner’s senior counsel P Wilson contended that the NSE had introduced the colocation facility without the approval of SEBI. It has amounted in commission of various illegal practices by the NSE employees, which included grant of preferential access to data dissemination servers to select stock brokers, counsel said.