India’s largest stock exchange, the National Stock Exchange (NSE), has taken a bold step toward closing a critical chapter in its regulatory journey. In a move that could potentially clear the path for its long-awaited IPO, NSE has offered a ₹1,388 crore settlement to the Securities and Exchange Board of India (SEBI) to resolve two high-profile legacy issues — the co-location and dark fibre cases.
This case surfaced after a whistleblower alleged that certain brokers were given preferential access to NSE’s co-location servers, enabling them to execute trades faster than others — an advantage in high-frequency trading. SEBI’s subsequent investigation confirmed the unfair access and raised serious questions about market integrity and fairness.
This matter involved NSE allowing an unauthorized vendor (Sampark Infotainment Pvt Ltd) to install dark fibre — optical fibre lines with minimal latency — for specific brokers. The vendor wasn’t approved by the Department of Telecommunications (DoT), nor was it listed as a recognized NSE service provider.
Together, these incidents triggered one of the biggest regulatory crackdowns in Indian capital markets history.
According to filings and internal sources:
₹1,165 crore is being offered for the co-location case.
₹223 crore for the dark fibre case.
If SEBI accepts this offer, pending legal matters in the Supreme Court will be withdrawn, and NSE’s path to IPO could finally be cleared. This is notably the highest settlement offer made by any Indian entity to date.
Many of the individuals involved in the violations have exited NSE, reducing the regulatory baggage. NSE has been keen to fast-track its IPO plans, especially after Tuhin Kanta Pandey took over as SEBI Chairman in February 2025. This latest move is seen as a final push toward resolving long-pending compliance matters.
While the co-location and dark fibre issues are now likely to be closed, SEBI still expects NSE to:
Upgrade its tech infrastructure, especially after recent trading system glitches.
Strengthen operational governance to ensure robust market oversight.
These steps are crucial before NSE can get the regulator’s final green light for its public offering.
NSE is one of the most valuable unlisted companies in India, with a strong monopoly in the equity trading ecosystem. However, regulatory overhang has long been a risk factor for investors. This settlement, if approved, will remove a major hurdle.
Improved listing prospects in the next 12–18 months.
Greater investor confidence post-regulatory cleanup.
Sets a precedent for out-of-court settlements in complex SEBI cases.
Disclaimer: This article is for educational and informational purposes only. It is not a recommendation to buy, sell, or hold any security. Please consult a SEBI-registered advisor before making any investment decisions.
