What is Co-location Trading?

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About Co-location Trading:

The National Stock Exchange 2009 started to offer co-location services to members of the exchange.
It allows a member to set up his server in a specifically earmarked data centre within the NSE’s exchange premises for a certain price.
The relative proximity allows members wishing to gain access to the entirety of buy and sell orders sent because of the reduced time taken for order execution.
Is it Illegal? : Stock exchanges across the world allow the practice to flourish as a paid service. The SEBI allowed exchanges to offer co-location in 2008.

Key facts about National Stock Exchange

It is one of the two main stock exchanges in India, with the other being the Bombay Stock Exchange (BSE).
The NSE is a prominent and technologically advanced stock exchange, and it plays a crucial role in India’s financial markets.
It is India’s largest financial market and the fourth largest market by trading volume.
The National Stock Exchange of India Limited was the first exchange in India to provide modern, fully automated electronic trading.

Q1: What is Nifty?

NIFTY is a market index introduced by the National Stock Exchange (NSE). It is a blended word – National Stock Exchange and Fifty coined by NSE. Nifty was established in 1996 with the name CNX Nifty. Further, in 2015, it was renamed Nifty 50.

Source: NSE co-location case: How Sebi found violations in 2019 but saw no evidence in 2024