The regulator has also issued show-cause notices to NSE and 14 management personnel as part of its probe .

The Income Tax (I-T) department has searched premises of National Stock Exchange (NSE) former top officials as also a number of brokers and private technology providers in a case related to algorithmic trading case still being uncovered, Indian Express has said.

As per the report, officials also searched premises of the wife of a senior official, and a research firm in connection with alleged irregularities in the case. Sources told the paper that the official’s wife is a director of a Mumbai-based company which allegedly provided technology to a stock broking company for unfair access during 2012-2014.

The department started searching premises on November 15, which may continue for the next few days. It has covered at least nine premises in Mumbai alone. The trading is orders that are provided at high speed by use of latest mathematical models involving automated execution of trade while co-location involves providing servers on the exchange premises, the report added.

It is also alleged that a number of brokers got access through co-location facility at the NSE, allowing a trader split-second faster access to data feed of an exchange. A mini-second faster access can also led to huge gains for a trader.

The Securities and Exchange Board of India (Sebi) is also probing the case tofind out whether brokers made illegal gains in coordination with exchange officials. Accusations of wrongful access pertain to a time when NSE used to send price information through a unicast system. In this system, information is disseminated to all members one after another.

The regulator has also issued show-cause notices to NSE and 14 management personnel as part of its probe in alleged lapses in algorithmic trading offered through NSE’s co-location facility, Indian Express added.

Allegations of wrongful access were first made in January 2015 by a whistleblower . The whistleblower wrote to the regulator alleging few brokers logged on to the NSE system with better specifications while engaged in trading, to their unfair advantage.

After three letters from the whistleblower, Sebi formed a panel under its Technical Advisory Committee (TAC) to find out allegations against NSE. The panel found that the architecture of NSE was prone to manipulation and market abuse, Indian Express added.