Sebi penalises BSE Rs 25 lakh for unequal data access, failure in oversight

India Today

26-06-2025

The Securities and Exchange Board of India (Sebi) has fined the Bombay Stock Exchange (BSE) Rs 25 lakh for not giving equal access to corporate information and for failing to properly supervise certain trading activities.In an order released this week, Sebi said that BSE allowed some users, including employees of its Listing Centre Module (LCM) and paid subscribers, to access company announcements before they were made public on the BSE's official website. The regulator said this early access gave some traders an unfair advantage, which goes against the rules of fairness and equal opportunity in the stock market.Sebi also criticised BSE for not taking action against brokers who were repeatedly changing client codes during trades. These changes raise concerns about possible misuse and lack of proper checks.Sebi called this failure 'laxity and negligence' and pointed out that BSE, being a first-level regulator, has a duty to maintain a clean and fair trading environment.The regulator said in its order, 'This case involves multiple acts of omission, laxity, and negligence, marked by a lethargic approach, which cannot be excused. If such regulatory oversight is allowed to continue unchecked, it risks damaging the credibility of both BSE and Sebi.'BSE has since made some improvements. It has added a time gap in the release of information to paid clients to avoid any unfair early access. However, Sebi said the problem existed earlier and had already caused a violation of the rules laid out in Regulation 39(3) of the SECC Regulations.BSE argued that there is no specific rule requiring it to provide corporate announcements via RSS feeds. Sebi replied that even if there is no such rule, the exchange still has a duty to make sure that all investors get the same information at the same time.Sebi further said, 'BSE, as a Market Infrastructure Institution (MII), bears a higher responsibility to uphold the principles of transparency. Any system that allows privileged early access—even due to technical reasons—must be rectified to maintain trust in the market.'The regulator decided to impose a monetary penalty under Section 23H of the Securities Contracts (Regulation) Act and Section 15HB of the Sebi Act, instead of opting for stricter measures. However, it stressed that the violations were serious and must not be repeated.Santosh Shukla, who issued the order, directed BSE to pay the Rs 25 lakh fine within 45 days from the date of receiving the order.Sebi also made it clear that if BSE fails to make the payment in time, recovery proceedings may be launched under section 28A of the Sebi Act. This could include attaching and selling the movable and immovable properties of BSE to recover the dues, along with applicable interest.This case brings attention to the importance of fair access to information and strong regulatory oversight in maintaining the trust of investors in India's capital markets.- Ends
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