SEBI's final report on co-location scam in one of India's leading stock exchanges — NSE — has come as a heavy jolt to all. Thus far, the stock exchange has been perceived as an institution with high professional integrity and procedural efficacy. The SEBI's final report has, however, put a big question mark on these lofty attributes. Though the stock regulator had flagged inconsistencies back in 2018 itself, the extent of the lapse was entirely unpredicted. NSE's failure is not just a saga of eroded professional integrity of the top officials of the national stock exchange, it is also a grave failure on the part of the institution of NSE itself. SEBI's revelations call for a revisit to the system of governance of such financial institutions which are by default bestowed with trust and awe. At the center of the controversy is the appointment of Anand Subramanian to a top management role in the institution by former MD and CEO Chitra Ramakrishna. Anand Subramanian was appointed without having the required experience of working in similar posts. So, what was the motivation behind his selection for the office? Shockingly, it was the wisdom of a 'Himalayan Yogi' with spiritual powers that was heeded to in putting Subramanian — an 'accomplice' of the yogi' — to the prominent role with his package running in multiples of crore per annum. His salary and other compensations are reported to have been increased periodically. Grave though it is, this misdoing represents just a mole of the problem with the NSE lapse. The accused persons are alleged for selling the rack space in a co-location facility that allows the buyers to access the stock updates in advance, and thereby making huge gains. Also, the problem goes far beyond being a mere incident of individual corruption at the top level. The fact that Subramanian was appointed way back in 2013-14 makes it difficult to digest that the NSE, as an institution, remained silent all throughout. It failed to act strictly even after the SEBI flagged the issue in 2018. It would be pertinent here to contemplate as to what prevented the NSE from acting against wrong-doers and plugging the loopholes. Was it just the exceeding power of the CEO that commanded the silence? Or was there some conflicting financial interest that would prevent the board members from expressing their concerns? More importantly, is it just an act of omission on the part of board members? While some of these questions remain unearthed as of now, the SEBI order was very straight and clear on the issue of complicity of the board in the entire matter. It said that the board was "aware of the exchange of confidential information" with the unknown Himalayan Yogi. This could simply be decoded to say that the NSE board was an equal partner in the crime. The NSE episode is as much a case of institutional fallacy as it is of individual corruption. In the aftermath of the revelations made by the SEBI order, the accused persons have been charged with a fine of Rs 2-3 crores, in addition to being banned in the financial market for a couple of years. The SEBI has also barred NSE from introducing any new product in the next six month. It has to be understood here that there is only that much SEBI could do. Thankfully, the CBI has taken stock of the situation. It is grilling the key accused and has booked some others. In the first place, the mystery around the Himalayan Yogi is still unresolved. The larger issue of institutional failure of the NSE is also to be unearthed. And finally, the wrong-doers need to be aptly punished to deter others from committing similar crimes. In addition to the high-level investigation, there is also a need to reconstruct the management and operational systems of financial institutions by avoiding unbridled powers to a limited set of individuals in any institution. Powers need to be distributed to ensure proper checks and balances. The NSE lapse is perhaps a call for bigger reforms in management of financial institutions.