Finshots Daily The BSE blip SEBI couldn’t ignore
Jun 30, 2025
Discover the recent fine imposed on the Bombay Stock Exchange by SEBI for allegedly providing select clients with early access to sensitive information. This raised significant questions about market fairness and integrity. The discussion highlights the crucial need for transparency in capital markets and how the flow of information can influence financial decisions. Tune in for insights on what this means for investors and market regulations.
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Reminder from Past Market Scandals
- SEBI's penalty against BSE reflects concern to avoid repeat of the 2015 NSE co-location scam, which involved unacceptable preferential access to market data.
- Regulators emphasize exchanges must remain neutral and level playing fields for all investors.
Unequal Access to Market Info
- BSE gave early access to sensitive company announcements to paid subscribers, creating an unfair speed advantage in trading.
- The exchange's design of a "pull" data system instead of a uniform "push" mechanism caused tiered information distribution, undermining market fairness.
Broker Code Modifications Abuse
- Brokers misused client code modifications by shifting trades between unrelated clients without proper oversight.
- This blind spot in BSE's system can enable tax evasion, profit dressing, and manipulation of trade records.