904-NMS-1220-15-F4.DOC server then least loaded with traffic, the fastest access; those downstream had to deal with increasingly burdened servers as more and more persons connected, with a corresponding increase in latency. Switching on servers ahead of time allowed some to gain an advantage and a priority. To mitigate this, the NSE took steps to balance its server loads and to more evenly distribute them. Technically, the letter suggests, this should have been enough. But (and this appears to be the nub of it) some started connecting to backup real-time servers with nil traffic, even though these were to be used only in emergencies, thus enabling quicker access to market data; and the NSE’s co-location services facilitated this early-bird data or information receipt. 9. It is in this scenario that we have to assess the concern that seems to have been expressed by the Defendants in their articles. They say that entities permitted co-location access gained a small and perhaps infinitesimal time advantage in receiving advance market information. This allowed a select handful to, as the Defendants put it, ‘front-run’ the rest of the market. In other words, knowing that a stock was likely to move, say, in a particular direction, algo trades would be triggered to take advantage of that advance information long before other individual traders lacking the advantage of co-location could capitalize or move on that information. The result is not as negligible, the Defendants say, as might appear. There is, firstly, some question of whether these algo trades worked to inject liquidity into the market or whether they created distortions in the real underlying value of the stocks in question. The point, they seem to suggest, is that the select handful got a very considerable advantage simply because they received 9 of 30 ::: Uploaded on - 10/09/2015 ::: Downloaded on - 03/02/2020 18:08:37 :::