NSE, arm, top execs pay Rs 73cr to settle 2021 tech glitch case

MUMBAI: In one of the biggest settlement orders in recent times, the National Stock Exchange (NSE), its clearing arm NSE Clearing (NCL), and three of their top employees have paid Rs 72.6 crore to settle Sebi's investigations of a technology outage that occurred on February 24, 2021.

In addition to the monetary penalty, Sebi also ordered Vikram Limaye, then NSE MD & CEO, Vikram Kothari, MD of NCL, and Shiv Kumar Bhasin, chief technology & operations officer of NSE, to do community service for 14 days and also upskill themselves with an appropriate training course as suggested by the regulator.

In July 2022, Limaye completed his five-year term as NSE MD and didn't seek re-appointment. Kothari and Bhasin are with NCL and the NSE, respectively.

On February 24, 2021, from about 11.30am, the trading system on the NSE had stopped functioning properly. As a result, the trading in the cash and derivatives segments had to be halted. After much effort, it was finally resumed at about 3.10pm with an extended spell till 5pm. Following that glitch, Sebi started an investigation to look into the possible causes. The current settlement order was a result of the same investigation.

According to the order, while the NSE paid Rs 49.8 crore to settle the case for it and two of its executives (Limaye and Bhasin), NCL paid Rs 22.9 crore to settle the case for it and Kothari.

In its show-cause notice, Sebi had cited several failures on the part of the NSE and NCL, including failure of the crisis management team that consisted of Limaye, Kothari and Bhasin. Pending the proceedings initiated by Sebi, the NSE, NCL and the three executives had moved settlement applications. The final payments for the settlement were made on June 16.