FPIs lobby for faster access to bourses with link to servers
The proposal - put forward by persons representing large offshore funds and custodians at a recent meeting with officials of the Securities and Exchange Board of India (SEBI) and the finance ministry - implies that buy or sell orders would flow directly from an FPI server to the exchange instead of being routed through a broker's co-location server.
Mumbai: Overseas investors are pushing for quicker access to Indian stock exchanges by linking their servers directly to exchanges, according to recent discussions with regulatory bodies. This proposal, presented by representatives from major offshore funds and custodians, suggests that orders would flow directly from an FPI's server to the exchange without passing through a broker's co-location server.
Such a direct connection could potentially reduce latency, give FPIs a speed advantage, and minimize the risk of trade information breaches. However, concerns have been raised about potential disparities among different categories of investors and the tax implications of such a move. The Securities and Exchange Board of India (SEBI) is currently evaluating the proposal, though it faces challenges under the Securities Contracts (Regulation) Act, which restricts direct access to exchange trading systems only to recognized exchange members.
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