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TMI Blog2019 (1) TMI 2052X X X X Extracts X X X X X X X X Extracts X X X X ..... e Informant, because of the alleged practices followed at OP, some trading members of the OP allegedly received preferential and unfair access to trading information, over others thereby enabling them to reap benefits viz. getting the price feeds and other data before other trading members to whom such preferential access was not provided, despite having availed co-location services. The Commission observes that discriminatory and abusive conduct which falls foul of the provisions of the Act falls within the jurisdiction of the Commission and can be independently examined by the Commission based on cogent facts and evidence. However, the allegations against the OP are yet to be established in an appropriate proceeding and also there is not sufficient information and data before the Commission about the role attributable to the OP, in the provision of discriminatory co-location services qua certain trading members, as alleged in the Information to arrive at a prima facie view. Thus, it may not be apposite for the Commission to delve into the allegations contained in the Information at present - The matter is ordered to be closed forthwith in terms of the provisions of Section 26(2) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... providing equal and fair access to all the trading members availing its co-location facility, provided preferential and unfair access to some trading members. The Informant has stated that this benefitted the trading members to whom the preferential access was provided in getting the price feeds and other data before the other trading members to whom such preferential access was not provided. The Informant has also alleged that this distorted the competition between the trading members availing the co- location facilities from the OP, leading to undue gains to the trading members to whom such preferential access was provided. 6. The Informant also alleged that the OP has abused its dominant position by providing preferential access to certain trading members of its co-location services, resulting in contravention of the provisions of Section 4 of the Act. For substantiating these allegations, the Informant has stated that the OP is providing services to its trading members which are neither inter-changeable nor substitutable for a consumer by reason of characteristics of the service, its prices and intended use. Therefore, the Informant has defined the relevant product market as &# ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Informant has stated that SEBI vide its letter dated 28.11.2016 directed the OP to initiate an independent examination (including forensic examination by an external agency). The Informant has further stated that the observations of the Report of the Independent Agency provided that: Different stock brokers were treated differently and there was no uniform approach applied across stock brokers with respect to allocation of new IPs across ports on existing servers and movement from one server to another. Ticks were disseminated faster to members connected to less crowded servers, thereby giving an advantage to such stock brokers. 10. As regards the pending co-location case, the Informant has averred that SEBI received an anonymous complaint from a whistle-blower against the OP in January 2015, alleging rigging of high-frequency trading systems at the OP's exchange because of which certain brokers with co-location servers at the OP were getting preferential access to market data. 11. The Informant has stated that the whistle-blower had written two more letters to SEBI in August, 2015, and October, 2015. The Informant has further stated that the media report of Mydigitalfc.com ti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... I's probe into the OP's algorithmic trading platform had highlighted that some traders had unfair access to market data and trading systems. The Informant has submitted that upon completion of the SEBI's investigation and on the basis of the above stated reports, SEBI initiated enforcement proceedings against the OP. 15. Based on the aforesaid facts and allegations, the Informant has inter-alia prayed for an investigation under Section 26(1) of the Act. Further, the Informant has also prayed for an interim order to restrain the OP from carrying out anticompetitive activities under Section 4(2)(b)(ii) as well as Section 4(2)(c) of the Act. 16. The Commission has carefully analysed the information filed by the Informant, the documents annexed therewith, and the information available in the public domain in this regard. 17. The basic grievance of the Informant is that by giving unfair preferential access to some trading members of its co-location services, the OP has limited and restricted the provision of services to other trading members availing the co-location service which resulted in 'denial of market access' to others to whom such unfair access was not given ..... X X X X Extracts X X X X X X X X Extracts X X X X
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