What is Co-location Trading?

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