SEBI in its ‘Observation Letter’ dated September 9, 2016, reiterated the observations made by the Jhunjhunwala committee. The regulator advised the exchange board to initiate an independent examination including a forensic examination by an external agency. It also passed an interim observation, pending investigation, to place all the revenue generated from co-location facility in a separate bank account.

The market regulator issued another letter on November 28 stating that the exchange had failed to comply with certain observations, including transferring the entire revenue generated from the co-location trading and facility into a separate bank account. The NSE board met on November 29 to comply with SEBI’s observation and deposited Rs 145.52 crore into a separate account. NSE intends to deposit the revenue earned each month from this segment into the escrow account, the exchange said in its filing on Wednesday.

Four days after SEBI issued its second letter to NSE, the exchange’s Managing Director and Chief Executive Officer, Chitra Ramkrishna resigned.