The Securities and Exchange Board of India (SEBI) has approved a settlement of ₹1,491 crore in connection with the National Stock Exchange of India (NSE) co-location and dark fibre cases. The exchange will pay the remaining ₹715 crore to complete the settlement.

The co-location case centres on allegations that certain brokers gained unfair, preferential access to NSE's trading infrastructure by connecting through the exchange's co-location facility, potentially giving them a speed advantage over other market participants. The related dark fibre matter involves allegations that some brokers were provided unauthorised private network connectivity to NSE's systems, further advantaging their order execution times. The allegations first drew regulatory scrutiny around 2015 and have since been a recurring focus of SEBI enforcement.

NSE, one of the world's largest derivatives exchanges by volume, has faced regulatory scrutiny over these issues for several years. The cases contributed to a prolonged delay in NSE's planned initial public offering, which the exchange had initially sought to launch years ago. SEBI, India's capital markets regulator, has authority over stock exchange governance, market integrity, and fair-access rules. Separately, former NSE chief executives Chitra Ramkrishna and Ravi Narain faced regulatory action over governance lapses linked to the period under investigation.

Under SEBI's settlement regulations, entities can resolve pending regulatory or enforcement proceedings by paying a settlement amount without admitting or denying the findings against them. The approval of this settlement concludes the regulatory proceedings related to these matters for NSE, though proceedings against other entities involved in the cases may continue independently.

Source: CNBC-TV18 Markets