NSE paid SEBI INR 400 mln Apr-Jun to settle FY24 inspection report on bourse
This story was originally published at 08:58 IST on 31 July 2025
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By Rajesh Gajra
NEW DELHI – The National Stock Exchange of India paid the Securities and Exchange Board of India settlement fees of INR 400 million during the June quarter to settle a case pertaining to the market regulator's inspection report on the exchange for 2023-24 (Apr-Mar), the management of the exchange said in a post-earnings call with shareholders Wednesday. It did not provide additional details on the case in the call.
SEBI carries out annual inspection of stock exchanges, clearing corporations, and depositories, which the market regulator considers to be critical market infrastructure institutions. In its annual report for FY24, the regulator had said it had conducted comprehensive inspections of NSE, BSE, the commodity derivatives exchanges, and their respective clearing corporations during the financial year. SEBI also said in the FY24 annual report that it had initiated focused inspections of surveillance functions of BSE, NSE, Central Depository Services, and National Securities Depository.
The settlement fees of INR 400 million paid by NSE to SEBI was reflected as a one-time expense under other expenses in the consolidated financial statement of the exchange for the June quarter. In FY25, NSE had paid a settlement amount of INR 6.43 billion on Sept. 25, 2024, to settle SEBI's show-cause notice of Feb. 28, 2024 alleging breach of various rules by the exchange in its past use of a members connectivity software application called trading access point. A few days later, on Oct. 4, 2024, SEBI had issued a settlement order providing a summary of the case and noting the receipt of settlement amount from NSE.
In Wednesday's shareholders call, NSE's management said the exchange had on Jun. 20 filed two separate applications with SEBI under the settlement regulations to settle the market regulator's orders on the co-location matter and the dark fibre case. The NSE management did not specify the settlement amounts offered by the exchange to SEBI in the two settlement applications but some reports in the media have claimed the co-location case settlement offer to be around INR 13 billion.
The co-location case refers to SEBI's INR 6.25-billion disgorgement order dated Apr. 30, 2019 in the co-location case and the INR 10-million penalty adjudication order of Feb. 10, 2021 on the same matter. SEBI had alleged in these co-location orders that NSE allowed preferential connectivity to select brokers to the tick-by-tick data dissemination servers, as a result of which these brokers allegedly made huge profits.
The NSE had appealed SEBI's orders in the co-location case. The Securities Appellate Tribunal had in its order of Jan. 23, 2023, set aside SEBI's direction for disgorgement and in its order of Jul. 12, 2023, set aside the adjudication order on co-location. SEBI had lodged an appeal in the Supreme Court against these rulings by the tribunal. Currently, the case is pending in the court.
The dark fibre or the lease lined connectivity case refers to SEBI's order in April 2019, directing disgorgement of INR 625 million by the exchange. SEBI had alleged in that order that NSE gave preferential treatment to two brokers when it allowed them to utilise the services of an unlicensed telecom service vendor to connect their co-location servers in NSE with that of BSE's co-location server through the facility of point-to-point connectivity. On appeal by NSE, the Securities Appellate Tribunal had quashed the disgorgement directions of SEBI in its order of Aug. 9, 2023. SEBI had filed an appeal against this ruling in the Supreme Court and the case is pending currently.
NSE had announced its June quarter earnings on Tuesday. The exchange's consolidated net profit increased 10% on quarter and 14% on year to INR 29.24 billion and its revenue from operations was INR 40.32 billion, up 7% on quarter and down 11% on year. End
Edited by Avishek Dutta
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