Dharmishta Raval, part of SEBI’s four-member High Powered Advisory Committee looking into the consent plea filed by the National Stock Exchange (NSE) in a case related to a probe into the co-location issue, will recuse herself due to a possible conflict of interest.
Raval is also an independent director on the NSE board. She was appointed to the exchange on February 5, 2016, exactly a year after the allegations of preferential access to brokers for algorithmic trading first surfaced, on January 14, 2015.
After over two years of fighting the allegations, the NSE sought an out-of-court settlement on the matter with the regulator on July 20.
SEBI’s High-Powered Advisory Committee on Settlement Orders and Compounding of Offences is responsible for studying and giving views on “accepting or rejecting of consent applications”. Raval is part of this committee.
Under the consent mechanism, capital market wrongdoers can negotiate a settlement with SEBI without accepting or denying guilt.
SEBI did not respond to an email query. When contacted by BusinessLine, Raval said: “I will request SEBI to recuse me in the matter.” She added that she would never want to be in a position that would lead to any conflict on the issue.
Raval, who is now an independent advocate, was SEBI’s executive director handling key assignments in the legal department before she resigned in 2003.
The other HPAC members are PR Ramesh, Chairman, Deloitte Haskins and Sells LLP; Anand Sinha, former RBI Deputy Governor; and VC Daga, former Judge, Bombay High Court.
Meanwhile, a SEBI official said the regulator was studying NSE’s application and may send further queries before taking a final view on consent.
In June, SEBI Chairman Ajay Tyagi had said the regulator would get a forensic audit conducted of NSE’s systems. The exchange has already undergone an audit each by Deloitte and E&Y, consultancy firms appointed by NSE itself.
As per the consent terms, any settlement can be reached only after conclusion of a probe into the matter.