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Informist, Thursday, Sept. 3, 2026

 

--SC disposes of SEBI pleas against NSE in co-location, dark fibre cases 

--CONTEXT:SEBI OKs NSE INR-15-bln settlement in co-location, dark fibre cases

 

NEW DELHI – The Supreme Court Thursday disposed of Securities and Exchange Board of India's appeals challenging the Securities Appellate Tribunal's orders that set aside market regulators disgorgement orders in co-location and dark fibre cases against National Stock Exchange of India, after both the parties had arrived at a settlement. In July, the market regulator had accepted the exchange's application under the settlement proceedings regulation for a settlement amount of INR 14.91 billion in co-location and dark fibre cases. However, the co-location case pending against National Stock Exchange's former managing director and chief executive officer Chitra Ramkrishna, and others will be decided separately, said the top court. 

 

The National Stock Exchange had filed the settlement application of INR 12.24 billion to close the market regulator's pending appeal in the Supreme Court in the co-location facility case. The NSE had also filed another application for a settlement amount of about INR 2.68 billion to close market regulator's pending appeal in the apex court in the co-location facility-related dark fibre case, also referred to as the lease lined connectivity case. The settlement amount in these two applications aggregated to about INR 14.92 billion.

 

The main co-location case had emanated from the market regulator's 2019 order in which it had directed NSE to disgorge INR 6.25 billion, along with interest at 12% per annum from Apr. 1, 2014. SEBI had alleged in this order that the NSE had allowed preferential connectivity to select brokers to the tick-by-tick data dissemination servers in its co-location facility which resulted in these brokers making substantial profits. In an appeal by NSE, the appellate tribunal had set aside the market regulator's order. The market regulator had then appealed against the appellate body's order in the Supreme Court. 

 

In the dark fibre case, SEBI had issued an order in 2019 directing the NSE to disgorge INR 626 million by the exchange, along with interest at 12% per annum since Sept. 11, 2015. SEBI had alleged that NSE had provided preferential treatment to two brokers when it allowed them to utilise the services of an unlicensed telecom service vendor to connect their colocation racks in NSE with their colocation racks in BSE through the facility of point-to-point connectivity. In an appeal by NSE, the appellate tribunal had quashed the disgorgement directions of SEBI. This ruling of the appellate body had also been appealed by the SEBI in the Supreme Court.

 

The NSE had filed on Jun. 18 the draft red herring prospectus for its initial public offering. The offering comprises an offer for sale of 148.91 million shares to be offloaded by some existing shareholders. The NSE will get the approval for its initial public offering when SEBI issues the final observation letter.  End

 

Reported by Surya Tripathi

Edited by Akul Nishant Akhoury

 

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