Supreme Court disposes of SEBI pleas against NSE’s co-location, dark-fibre cases

The Supreme Court dismissed SEBI's appeals against the National Stock Exchange (NSE) in the ongoing co-location and dark-fibre cases, clearing a major regulatory hurdle for the country's largest stock exchange as it prepares for its public listing. The two-member bench of the apex court disposed of the appeals after the parties reached a settlement of ₹1,491.21 crore, without admitting or denying guilt.

Amit Tungare, Managing Partner at Asahi Legal, noted that the Supreme Court's decision is a "green light" for NSE's much-awaited IPO, which has been delayed for years due to regulatory overhang. The co-location case, which began in 2015, involved complaints that some brokers used NSE's co-location facility to gain an unfair advantage in accessing the exchange's data.

SEBI ordered NSE to pay ₹624.89 crore, along with restrictions, and later had the order revoked. The dark-fibre case alleged that two brokers received an advantage through point-to-point connectivity and ordered disgorgement of ₹62.6 crore plus interest. The Securities Appellate Tribunal previously set aside the disgorgement orders.

While the settlement is a significant step for NSE towards its IPO, it does not automatically clear individuals associated with the cases, such as former officials Chitra Ramkrishna and others, from personal proceedings and criminal investigations. NSE's IPO, valued at around ₹5 lakh crore, is expected to be one of India's largest, with an offer size of approximately ₹30,000 crore.