Ravi Narain Steps Down As NSE Vice Chairman

Ravi Narain stepped down as vice-chairman of the National Stock Exchange Ltd., a week after the market regulator sent show-cause notices regarding a probe into high frequency trades at the exchange, a senior official told BloombergQuint requesting anonymity.

Narain stepped down to ensure that the probe wasn’t affected by his presence on the board, according to the official cited above. Narain, 61, was among the co-founders of the exchange and served as the chief executive officer and managing director till 2013.

NSE Chairman Ashok Chawla refused to comment on the development.

Narain is the second senior executive to step down after the Securities and Exchange Board of India began probing a whistleblower’s allegations of the exchange providing preferential access to certain brokers and traders through its co-location service. It facilitates high-speed trading by allowing brokerages to place servers in the exchange building. Narain’s successor Chitra Ramkrishna had quit less than two years into her term in December last year.

Also Read: Two Governance Controversies That May Have Prompted Chitra Ramkrishna’s Resignation

IPO In Limbo

The two are among the 14 current and former NSE employees who received SEBI’s show-cause notices last week. The high-speed trades in question occurred between 2010 and 2015, overlapping their terms at the helm. The investigation has delayed approval for the exchange’s Rs 10,000-crore initial public offering.

The maiden offering also faces another hurdle. In February, the NSE board named Vikram Limaye, former chief of infrastructure financier IDFC Ltd., as the exchange’s next managing director and chief executive officer for five years. SEBI is yet to approve his appointment.

Audit Report Due

The exchange had hired consultancy firm Deloitte India to conduct an audit on SEBI’s orders into the co-location controversy. The audit found that the exchange’s systems are prone to manipulation. NSE then engaged EY India for an audit of its currency segment. The report is expected in June.

Also Read: NSE’s Systems Prone To Manipulation, Says Deloitte

Subramanian Anand’s Appointment

The co-location probe is not the only controversy involving NSE in recent times. The appointment of Subramanian Anand, his ascent to the position of group operating officer and his remuneration, the second highest at the exchange, were found to be lacking due process. A board inquiry was constituted but Anand resigned before it was completed.