What is Co-location trading?

Why in news?

• Securities and Exchange Board of India passed its first order after adjudicating the co-location case in April 2019, when it fined the National Stock Exchange (NSE) a sum of ₹625 crores. 

Key facts about Co-location trading

• The National Stock Exchange 2009 started to offer co-location services to members of the exchange.
• It allows a member to set up his server in a specifically earmarked data centre within the NSE’s exchange premises for a certain price.
• The relative proximity allows members wishing to gain access to the entirety of buy and sell orders sent because of the reduced time taken for order execution.
• Is it Illegal? : Stock exchanges across the world allow the practice to flourish as a paid service. The SEBI allowed exchanges to offer co-location in 2008.

What is the Securities Appellate Tribunal?

• It is a statutory body established under the provisions of Section 15K of the Securities and Exchange Board of India Act, 1992
• It hears and disposes of appeals against orders passed by
  • The Securities and Exchange Board of India
  • Insurance Regulatory Development Authority of India
  • The Pension Fund Regulatory and Development Authority (PFRDA)