SEBI Settles NSE Co-Location And Dark Fibre Cases For ₹1,491 Crore

The Securities and Exchange Board of India (SEBI) gave in-principle approval on 30 July to settle the National Stock Exchange's (NSE) long-running co-location and dark fibre cases for a total of ₹1,491.21 crore, removing one of the biggest regulatory overhangs facing India's largest stock exchange as it progresses toward its initial public offering (IPO).

SEBI communicated the decision by email on 30 July, directing NSE to pay the remaining ₹714.74 crore to complete the settlement. The exchange had already deposited ₹776.47 crore with the regulator, which will be adjusted against the total settlement amount.

Details of the NSE Settlement Amount

• Co-location case settlement: ₹1,223.56 crore

• Dark fibre case settlement: ₹267.65 crore

• Already deposited by NSE: ₹776.47 crore

• Fresh payment required: ₹714.74 crore

• Total provisions made by NSE: ₹1,491.21 crore, including ₹1,391.21 crore recognised recently and an earlier provision of ₹100 crore

What The Cases Were About

The co-location controversy dates to 2009, when NSE introduced a facility allowing brokers to place trading servers inside its data centre for a fee. Closer proximity reduced the time needed to receive market data, giving co-located brokers a speed advantage. SEBI later investigated allegations that certain brokers received preferential or faster access to trading data through the system, raising concerns about fair market access.

The dark fibre matter centred on allegations that certain brokers received lower-latency connections through the exchange's fibre network, again raising questions about equal treatment of market participants.

What Happens Next

SEBI and NSE are expected to jointly approach the Supreme Court to seek permission to withdraw pending appeals related to both matters. Once the court permits the withdrawal and NSE completes payment, the litigation is expected to close entirely.

The settlement comes weeks after NSE disclosed its revised settlement applications in its draft red herring prospectus. Merchant bankers expect SEBI to grant IPO approval next month. A compensation claim filed by the Metropolitan Stock Exchange of India remains a separate pending matter.

NSE submitted its original settlement application in June 2025 and revised the proposal in March 2026, increasing the amount to ₹1,491.21 crore.

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