SEBI v. PACE Stock Broking Services Pvt. Ltd. (NSE co-location secondary server, 2022)
Judgment entered
Checked against the primary document on October 9, 2026. The library's summary, tags and figures for this record were compared with the regulator's own document by an AI model (Claude) following written instructions, in a single reading of the order; an independent second reading of 60 SEBI records agreed on every field for 56, the four misses being penalty amounts; a later sample of 50 of the SEBI records added on 9 October agreed on every field for 46. No lawyer has reviewed them. A checked record can still contain errors, and checked does not mean endorsed. See how we check records or report a correction.
In April 2022 a SEBI adjudicating officer fined the broker PACE Stock Broking Services Rs 6,00,000 over its use of the NSE co-location secondary server, which SEBI treated as an unfair trade practice. The order finds that PACE repeatedly connected to the backup tick-by-tick feed without valid reason, including after the exchange asked it to explain.
The record
| Agency | SEBI (India) |
|---|---|
| Date filed | 2022-04-29 |
| Date resolved | 2022-04-29 |
| Court | SEBI adjudicating officer |
| Status | judgment |
| Asset class | equities, derivatives |
| Instruments | NSE cash, futures and options and currency derivatives segments |
| Venue | NSE |
| Criminal parallel | No |
| Defendants | PACE Stock Broking Services Pvt. Ltd. |
| Techniques |
What was ordered
- Civil penalty
- —
- Disgorgement
- —
- Prejudgment interest
- —
- Total relief
- —
- Alleged gain
- —
- Penalty as published
- 600k INR
What is alleged to have happened
The order of 29 April 2022 arises from SEBI's investigation of the NSE co-location facility, in which some trading members were said to have had preferential access to tick-by-tick market data. PACE Stock Broking Services Pvt. Ltd. was one of the members examined, and a forensic audit by Ernst & Young covered periods from 2010 to 2014 depending on the market segment.
SEBI alleged that PACE connected to the secondary server on 319 trading days in futures and options, 399 in the cash market and 124 in currency derivatives, reaching 92 percent of futures and options days in 2013, even though exchange guidelines allowed the secondary source only when the primary feed was unavailable. It also alleged that PACE kept doing so after an NSE email of March 2014 asked why it was not using the primary server. SEBI charged unfair trade practices under the PFUTP Regulations and section 12A of the SEBI Act, plus breaches of NSE bye-laws and the brokers' code of conduct.
The adjudicating officer found that routinely using the secondary server against the exchange's guidance was an unfair trade practice that undermined fair and equal access, violating Regulation 4(1) of the PFUTP Regulations as well as the NSE bye-law and code-of-conduct provisions. The order does not rest on a finding that PACE traded on faster data to the detriment of others or that it was fraudulent in the narrow sense, and it records no quantified gain or investor loss or complaint.
The sanctions were Rs 5,00,000 under section 15HA and Rs 1,00,000 under section 15HB of the SEBI Act, Rs 6,00,000 in total, payable within 45 days. No market restriction was ordered.
The record does not show whether PACE appealed, whether it gained any trading advantage from the connections, or how this order relates to the exchange's own responsibility for the co-location arrangements.
This library tags the matter as no specific technique, because the conduct is an unfair-practice breach of co-location rules rather than one of the library's trading techniques. The tagging is ours, not the regulator's.
For the regulator's own account of the facts, read the primary document linked above. This page deliberately summarises the structured record rather than reproducing the order.
Timeline
- 2022-04-29 SEBI adjudication order (29 April 2022)
Primary documents
Everything on this page derives from the documents below. Where our summary and the primary document disagree, the primary document is right.