Securities Appellate Tribunal (SAT)

Securities Appellate Tribunal (SAT)

News: Recently, The Securities Appellate Tribunal (SAT) has overturned the Securities and Exchange Board of India’s (Sebi) fine of Rs 7 crore on the National Stock Exchange (NSE) in the dark-fibre case.

What is SAT?
• The Securities Appellate Tribunal (SAT) is a statutory body established under the provisions of Section 15K of the Securities and Exchange Board of India Act, 1992.
• It was primarily established to hear and dispose of appeals against orders passed by the Securities and Exchange Board of India (SEBI) or by an adjudicating officer under the Act.
• In addition to this, SAT also hears and disposes of appeals against orders passed by the Pension Fund Regulatory and Development Authority (PFRDA) under the PFRDA Act, 2013.
• The SAT exercises jurisdiction, powers, and authority conferred on the Tribunal by or under the SEBI Act or any other law for the time being in force.

Composition of SAT:
• One Presiding Officer: The person appointed as the presiding officer should meet the following requirements.
o The retired or sitting judge of the Supreme Court
o Chief Justice of the High Court
o Judge of the High Court, who has completed at least seven years of service as a judge in a High Court
• Judicial and Technical Members: The number of Judicial and Technical Members is determined by the Central Government. Qualification as follows:
o Judicial Member: Judge of High Court for at least five years of service
o Technical Member:
o Secretary or an Additional Secretary in the Ministry or Department of the Central Government or any equivalent post in the Central Government or a State Government
o Person of proven ability, integrity, and standing having special knowledge and professional experience, of not less than 15 years, in the financial sector including securities market or pension funds or commodity derivatives or insurance
• The Presiding Officer and Judicial Members are appointed by the Central Government in consultation with the Chief Justice of India or its nominee.
• The tenure for the Presiding Officer or the Judicial or Technical Member is five years from the date of appointment and they are eligible for re-appointment for another term of a maximum of five years.
• However, no presiding officer or the Judicial or Technical Member shall hold office after they have attained the age of 70 years.

What is the Dark Fiber case?
• The Dark Fiber case in India is related to the National Stock Exchange (NSE) colocation scam. In this case, it was found that a handful of brokers profited significantly by exploiting the loopholes in NSE’s colocation facility and getting access to the exchange’s stock price feeds ahead of the rest of the market.
• Colocation means a broker being allowed to place his IT servers right next to NSE’s servers, for a fee. This is legitimate and allows brokers faster access to the price feeds as soon as they are broadcast by the NSE’s trading engine to all members. However, some brokers were able to subvert rules and get access to the price feed ahead of the rest of the market on a regular basis.

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