MUMBAI: Weeks before he put in his papers, an employee of the National Stock Exchange , which is battling allegations of unduly favouring some brokers , told the forensic audit team that "oral instructions for server allocations and other changes" were often received from ‘seniors’.In the opaque world of high-frequency trades — where a few microseconds’ advantage enables a broker outfox rivals — connecting to the right server to execute trades faster than others can make all the difference.However, Abhishek Soni , the employee concerned, refused to name the seniors or give his statement in writing to Deloitte Touche Tohmatsu India which carried out the forensic review of co-location facility that NSE provides to member brokers. Co-location or co-hosting service allows brokers to locate their trading systems within the exchange premise and is crucial for brokers carrying out high-frequency or algorithmic trades. Being closer to the exchange trading system, brokers gain from lower latencies and faster execution of trades.Missing emails, lost trails, contradictory statements and ominous silence of some employees mark the audit report which nonetheless highlights clear possibilities of the exchange disregarding rules — and occasionally running without well-laid-down rules and protocols — to give preferential treatment to a clutch of brokers.Deloitte, which reviewed the information pertaining to futures and options trades from 2010 to 2015, could not access email records of employees who have already left the organisation and of those whose computers had new operating system installed in 2016.There were allegations that a handful of brokerages gained by logging in early, multiple log-ins, and connecting themselves to less crowded secondary server. A member who was aware of the sequential nature of dissemination of price data could derive an advantage by logging early into the system.Based on discussions with Soni (who was in the product support and management, or PSM, team), Deloitte learnt that the decision to give more than one server to members with multiple internet protocols (IP) was aimed at reducing risk. But Soni could not recall how this decision was reached at as well as the threshold IP number for gaining access to multiple servers.Despite resistance from his team, Jagdish Joshi (project manager, Colo Support) directed to move four IPs of the brokerage OPG to a different server. Indeed, the Deloitte report (which has been reviewed by ET) says that the PSM deactivated IPs of another member to accommodate the four IPs of OPG.It was possible for NSE to negate a broker’s advantage of connecting first by implementing a ‘randomiser’ which could randomly pick a connection to begin dissemination of data, rather than starting with the first connection each time. But the suggestion to put in randomiser was ignored.One of the employees, Hozefa Poonawala, had suggested the implementation of a load balancer in an email dated January 4, 2012 to Mamatha Rangaprasad and copied to Rajnish Nagwekar, Smrati Kaushik and Balakrishnan M who were employees of NSE Tech — a NSE subsidiary that met the captive needs of the bourse which was headed by N Muralidaran.None of the members Deloitte spoke to were able to provide the reasons or documentation for not implementing randomiser in all servers.ET’s text messages to these persons went unanswered while an official of a PR firm hired by NSE said that the exchange cannot discuss anything that is not mentioned in its DRHP filing.Certain members, said Deloitte, "may have received advice from someone within the exchange" that there was an advantage in receiving market feeds on early logins to TBT (tick by tick) servers.It’s unclear whether Joshi or other members of the IT team had discussed the server issues with senior officials like Suprabhat Lala (who was in charge of trading and even customer relations till 2011), Ravi Varanasi (in charge of inspection and surveillance) and Hari K (who was responsible for memberships).Members having multiple log-ins to a single dissemination server through multiple IPs assigned could gain advantage by logging in first, second and third since flow of tick-by-tick data was sequential as per its architecture.Most information regarding the architecture of the TCP based TBT system — the sequential data transmission mechanism which was later replaced with a multi-cast data dissemination system that did not favour early log-ins —was provided to Deloitte orally by relevant teams but often the info shared in different discussions differed. For instance, emails reviewed by Deloitte showed there had been internal instructions that members were not to be moved across TBT servers without appropriate justifications.But during discussions the consultant was told by NSE officials that there were no documented policies.Deloitte said there were indications of preferential access where members of NSE’s IT team specifically appeared to ask for certain members to be moved to specific servers while denying others the same.OPG’s continuous access to a particular server between December 10, 2012 and May 30, 2014 may not have been possible without the knowledge of NSE officials, observed Deloitte.The forensic team found lack of documented policies and protocols with respect to various aspects of the function of the TBT system, including manner of allocation of member IPs to servers, connections to secondary servers, and dealing with member requests for reassignment to different servers etc. Surprisingly, after NSE confirmed completion of data restoration exercise from all TBT servers for review, Deloitte discovered additional TBT servers which had not been put through the restoration process and NSE team was unaware of them.