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.
A division bench of Justices JB Pardiwala and K Vinod Chandra heard the matter. The relief comes as the NSE’s nearly ₹22,562 crore initial public offering (IPO) is open for subscription. The NSE IPO closes for subscription on Monday, September 21.
Preferential access
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. The matter later expanded to include issues related to dark-fibre and leased-line connectivity.
The main co-location case originated from a SEBI order passed in 2019, in which the regulator directed NSE to disgorge ₹625 crore along with interest at 12 per cent per annum from April 1, 2014. 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.
NSE challenged the regulator’s order before the Securities Appellate Tribunal, which set aside SEBI’s disgorgement order. SEBI subsequently approached the Supreme Court against the tribunal’s decision. In 2019, SEBI directed NSE to disgorge around ₹625 crore, along with 12 per cent annual interest from April 1, 2014, in connection with the co-location matter. NSE challenged the order before SAT, which subsequently set aside SEBI’s disgorgement order. SEBI then challenged the SAT’s decision in the Supreme Court. 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 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.
On September 3, 2026, the top court disposed of SEBI’s pending appeals after taking note of the settlement. And on Friday the bench permitted settlement bringing the pending proceedings to a close.