Sebi directs bourses to provide co-location facility in transparent manner

MUMBAI: After the recent high volatility in stock markets, the Securities and Exchange Board of India has directed bourses to provide the co-location facility in a fair and transparent manner.

The regulator said exchanges will have to provide all market participants availing co-location facility fair and equal access to their facilities and data feeds. Besides, they have to ensure that the size of the co-located or proximity hosting space is sufficient to accommodate all the stock brokers and data vendors who are desirous of availing the facility.

Sebi has also asked exchanges to allow routing of orders to other exchanges from the co-location facilities.They will have to expeditiously decide on the request of the desirous stock brokers for availing this facility and communicate the decision within 15 days from the receipt of the request.In case of a rejection,they will have to provide reasons in writing to the brokers.

" provide the flexibility to avail rack space in the co-location or proximity hosting so as to meet the needs of all stock brokers desirous of availing such facility," Sebi said in a circular on Tuesday.Exchanges have been asked to put in place systems to implement these guidelines within three months.

The regulator has also asked exchanges to implement suitable mechanism to protect their systems and of stock brokers at co-location facility from unauthorized access,frame guidelines on access and conduct of the personnel of brokers and also not provide them any access to exchange's trading platform and databases.