{"id":33965,"date":"2018-10-30T15:15:03","date_gmt":"2018-10-30T09:45:03","guid":{"rendered":"https:\/\/blog.forumias.com\/?p=33965"},"modified":"2018-10-30T15:15:03","modified_gmt":"2018-10-30T09:45:03","slug":"how-a-split-second-advantage-can-bring-huge-unfair-gains-at-the-nse","status":"publish","type":"post","link":"https:\/\/forumias.com\/blog\/how-a-split-second-advantage-can-bring-huge-unfair-gains-at-the-nse\/","title":{"rendered":"How a split-second advantage can bring huge unfair gains at the NSE"},"content":{"rendered":"<p><a href=\"http:\/\/indianexpress.com\/article\/explained\/national-stock-exchange-algorithmic-trading-it-raids-stock-market-indian-economy-4940892\/\"><span style=\"font-weight: 400;\">How a split-second advantage can bring huge unfair gains at the NSE<\/span><\/a><\/p>\n<p><b>Context<\/b><\/p>\n<ul>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">I-T has searched the premises of top former exchange officials as part of a multipronged investigation into how brokers got preferential access to the trading system.<\/span><\/li>\n<\/ul>\n<p><b>What is the controversy pertaining to the National Stock Exchange (NSE) and algorithmic trading?<\/b><\/p>\n<ul>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">The NSE is facing allegations that some brokers got preferential access to the trading system through the co-location facility at the stock exchange <\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">The allegations of unfair access were first made by a whistle blower in January 2015.<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">The whistle blower stated that a few brokers were able to log on to the NSE system with better hardware specifications while engaged in algorithmic trading to their unfair advantage.<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">The letter to Sebi alleged that sophisticated market manipulation had been taking place at the NSE co-location centre.<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">It also said that NSE had allowed a non-empanelled Internet Service Provider (ISP) to lay fibre optic cables on the premises for a few stock brokers.<\/span><\/li>\n<\/ul>\n<p><b>What is Algorithmic trading?<\/b><\/p>\n<ul>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Algorithmic trading refers to orders generated at superfast speed by the use of advanced mathematical models that involve automated execution of trade.<\/span><\/li>\n<\/ul>\n<p><b>What happened after the allegation came to light?<\/b><\/p>\n<ul>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Sebi formed an expert committee under its Technical Advisory Committee (TAC) to examine the allegations against NSE.<\/span><\/li>\n<\/ul>\n<p><b>What action has Sebi taken so far?<\/b><\/p>\n<ul>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">It has issued show cause notices to NSE and 14 key management personnel as part of its investigation into alleged lapses in high-frequency trading or algorithmic trading.<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Sebi proposed measures to tighten rules for algo, citing concerns about fair access to markets.<\/span><\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"<p>How a split-second advantage can bring huge unfair gains at the NSE Context I-T has searched the premises of top former exchange officials as part of a multipronged investigation into how brokers got preferential access to the trading system. What is the controversy pertaining to the National Stock Exchange (NSE) and algorithmic trading? The NSE&hellip; <a class=\"more-link\" href=\"https:\/\/forumias.com\/blog\/how-a-split-second-advantage-can-bring-huge-unfair-gains-at-the-nse\/\">Continue reading <span class=\"screen-reader-text\">How a split-second advantage can bring huge unfair gains at the NSE<\/span><\/a><\/p>\n","protected":false},"author":61,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"footnotes":""},"categories":[555],"tags":[],"class_list":["post-33965","post","type-post","status-publish","format-standard","hentry","category-test-1","entry"],"jetpack_featured_media_url":"","views":{"total":0,"cached_at":"","cached_date":1704667196},"jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/33965","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/users\/61"}],"replies":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/comments?post=33965"}],"version-history":[{"count":0,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/33965\/revisions"}],"wp:attachment":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/media?parent=33965"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/categories?post=33965"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/tags?post=33965"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}