NSE co-location scam & Yogi SCAM

The NSE co-location scam involves market manipulation at India’s largest stock exchange, the National Stock Exchange of India.

Certain people got market information ahead of the rest of the market, allowing them to earn huge profits, thus violating the NSE’s demutualization exchange governance and transparency-based system.

What is the meaning of demutualization of stock exchange?

"Demutualization” is the transition of a securities exchange from a mutual association of exchange members operating on a not-for-profit basis to a limited liability, for-profit company accountable to shareholders.

Previously Insiders’ alleged collaboration in rigging NSE’s Algo-trading and using co-location servers resulted in large earnings for a group of brokers.

What is Algo-trading?

Algorithmic trading or Algo-trading is an order executing method using pre-programmed automated trading instructions that account for price, time, and volume.

The Securities and Exchange Board of India (SEBI), Central Bureau of Investigation (CBI), and the Income-tax Department are investigating the NSE co-location case. They are looking into the involvement of NSE and SEBI officials, as well as NSE’s current and former executives and brokerages.

What is Co-location?

Co-location facilities are certain dedicated spaces in the NSE building and are extremely close to the dedicated exchange servers where algo and high-frequency traders can deploy their programs or systems.

Because the co-location facilities are so close to the stock exchange computers, traders who use them have an advantage over other traders because of the reduced time taken for order execution.

NSE Chitra Ramkrishna –Yogi SCAM ?

Chitra Ramkrishna, a former chairperson of National Stock Exchange – was manipulated by a “Siddha Purusha/Yogi ( unidentified spiritual guru) and allegedly provided him confidential company information including the NSE’s five year projections, financial data, dividend ratio, business plans, agenda of board meetings and also consulted him on employee annual appraisals, an order by market regulator Sebi said last week.

The CBI has also banned Chitra Ramkrishna along with NSE’s former Group Operating Officer Anand Subramaniam and ex CEO Ravi Narain from travelling outside the country.

A lookout notice has been issued against all the above three .