Sebi issues a notification to the NSE over alleged trading programme usage

The Securities and Exchange Board (SEBI) of India has asked the National Stock Exchange(NSE) to explain an accusation that certain high-frequency traders hacked its software to fire hundreds of orders without being detected, squeezing out other users from the system.

The suspected exploitation of TAP (trading access point) software in 2013 was discovered four years later by income tax officials as part of an inquiry into the colocation scandal, which includes former NSE chief executives Chitra Ramkrishna and Ravi Narain. According to two people with knowledge of the incident, Sebi recently issued a show-cause notice to the NSE based on the conclusions of a retired high court judge engaged to investigate the TAP usage, the Economic Times reported. The NSE TAP system was launched in 2008 to track the volume of orders sent to the stock exchange in order to impose a fee for transactions.