The National Stock Exchange (NSE), the exchange’s former managing director and CEO Vikram Limaye and 8 others have reached an agreement in the Trading Access Point (TAP) misuse case. NSE and these people will pay Rs 643 crore to the market regulator Securities Exchange Board of India to settle the case. This is one of the largest settlement amounts till date. The case has been resolved through agreement without admitting or rejecting the findings of fact and law. This settlement has cleared the way for NSE’s IPO, which has been awaited for a long time. Due to this dispute, the initial public offer of the exchange was getting delayed. Apart from NSE and Limaye, those who settled the case include Umesh Jain GM Shenoy, Narayan Neelakantan, VR Narasimhan, Kamala K, Nilesh Tinekar, R Nandakumar and Mayur Sindhwad. SEBI had sent notice in February 2023 This matter came to light in February 2023 when SEBI issued a show cause notice to NSE. It was said in that notice that many brokers have benefited by creating disturbances in the system through TAP and NSE has failed to take adequate steps to stop it. Trading members registered with NSE joined TAP to establish communication with the NSE trading system. TAP was launched in 2008 TAP was an application that was placed by NSE between the front-end and the host end so that all communication between the front-end and the host-end is through this TAP application. That is, orders to buy and sell shares are placed through this software. This software was launched in 2008. In 2016, a new service called Direct Connect was introduced. NSE introduced TPA to monitor the number of orders sent by brokers to the stock exchange so that it could charge transaction fees from them. TPA used to send orders to the stock exchange from several servers. Meanwhile, in a complaint filed with SEBI in 2013, it was alleged that high frequency traders manipulate the TEP software and place orders without transaction fees. SEBI continued to investigate the matter and in 2016 a new service called Direct Connect was introduced as an option to TAP. Direct Connect was used for trading in the equity segment till September 2019. When SEBI started investigating the colocation scam involving then NSE chief Chitra Ramakrishna and Ravi Narayan in 2017, the misuse of TAP came to light.
