This refers to the editorial “Is disclosure enough?” (FE, December 30, 2016). In order to allay the fear and concern of unfair and inequitable access to the trading systems of exchanges, the Securities and Exchange Board of India (SEBI) brought out a discussion paper Strengthening of the regulatory framework for algorithmic trading and co-location in October 2016 to seek comments and input from all stakeholders, including investors, Market Infrastructure Institutions (MIIs) and intermediaries. For strengthening the regulatory framework, it proposed the introduction of several market mechanisms like minimum resting time for orders, random speed bumps or delays in order processing/matching, review of tick-by-tick data feed, maximum order message-to-trade ratio requirement, etc. It is unfortunate that the NSE’s board of directors failed to detect irregularities like granting some brokers preferential access to trading data and had to swing into action only after a whistleblower’s revelations to the market regulator prompted the latter to apply necessary corrective. It is time the corporate governance norms were overhauled and the directors’ responsibility reinforced. It is imperative for the regulator to provide a level playing field to market participants irrespective of their technological of financial strength.
Shreyans Jain, Delhi