The Supreme Court on Friday approved the settlement of all pending co-location cases between market regulator Securities and Exchange Board of India (SEBI) and the IPO-bound National Stock Exchange (NSE), bringing the curtain down on the decade-old dispute. According to ANI, a division bench of Justices JB Pardiwala and K Vinod Chandran heard the matter, with the relief coming as the NSE's nearly ₹22,562 crore initial public offering (IPO) is open for subscription. The NSE IPO opened on September 17 and will close on September 21, with the price band fixed at ₹1,700-₹1,785 per share. The settlement covers a total payment of ₹1,491.21 crore by NSE under SEBI's settlement mechanism, with the amount comprising ₹1,223.56 crore towards the co-location matter and ₹267.65 crore towards the dark fibre case.
The NSE co-location case refers to allegations that certain brokers received preferential access to the exchange's co-location infrastructure and market-data feeds, potentially giving them a speed advantage over other market participants. As reported by ANI, the matter concerned allegations of preferential access to the Tick-by-Tick data feed and shortcomings in NSE's system for ensuring fair and equitable access to its trading infrastructure. The proceedings also examined issues including the absence of a randomiser, IP allocation and load-balancing, and access to secondary servers. The main co-location case originated from a SEBI order passed in 2019, in which the regulator directed NSE to disgorge ₹624.89 crore with 12% annual interest from April 1, 2014 to the Investor Protection and Education Fund.
SEBI had alleged that NSE provided preferential connectivity to certain brokers to its tick-by-tick data dissemination servers at the co-location facility, which resulted in these brokers making substantial profits. According to ANI, NSE challenged the regulator's order before the Securities Appellate Tribunal, which set aside SEBI's disgorgement order but directed NSE to pay ₹100 crore to the Investor Protection and Education Fund, holding that the exchange had committed lapses in ensuring fair access and due diligence. SEBI subsequently approached the Supreme Court against the tribunal's decision. In July 2026, SEBI accepted NSE's settlement applications covering the co-location and dark-fibre matters. As part of the settlement, NSE had paid ₹1,491.21 crore under SEBI's consent mechanism, with the exchange having already deposited ₹776.47 crore and subsequently paying another ₹714.74 crore after SEBI accepted the settlement proposal.
The dark fibre dispute related to Point-to-Point connectivity provided through an unauthorised service provider to certain brokers, with SEBI's investigation examining the connectivity between NSE's co-location facility and the BSE co-location facility. As reported by ANI, separate proceedings relating to the dark fibre matter also reached the SAT, where the tribunal examined allegations concerning the use of Point-to-Point connectivity through Sampark Infotainment and the role of NSE officials and brokers. The dispute dates back nearly a decade, with SEBI's Whole Time Member passing an order on April 30, 2019, directing NSE to disgorge ₹624.89 crore with 12% annual interest from April 1, 2014**. With the Supreme Court disposing of the pending proceedings and SEBI closing the related enforcement actions, the legal and regulatory uncertainty hanging over the exchange has been removed.
