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Co-location case: SEBI will appeal the SAT decision

The Securities and Exchange Board of India (SEBI) has decided to appeal against the order of the Securities Appellate Tribunal (SAT) in the co-location case. SAT had recently allowed a plea of two brokers—Virtuous Retail Services and Way2Wealth Brokers—against the SEBI order, which had directed them to disgorge profits made by allegedly taking advantage of the co-location facility at the National Stock Exchange (NSE).

SEBI had alleged that these two brokers had used the co-location facility at the NSE to gain an unfair advantage in their trading activities. The SAT, however, had quashed the SEBI order on the ground that it was passed without any hearing or opportunity to the two brokers.

In the appeal, SEBI is likely to argue that the SAT erred in allowing the plea of the two brokers, as the SEBI order was passed after due process of law. SEBI is expected to argue that it had given the two brokers ample opportunity to present their case, but they had failed to do so.