On March 27, 2026, the High-Powered Advisory Committee (HPAC) of the Securities and Exchange Board of India reviewed and recommended the settlement application filed by the National Stock Exchange of India in the long-running co-location case, according to officials aware of the HPAC proceedings.
The recommendation now awaits final approval from SEBI’s panel of Whole-Time Members (WTMs), making this a critical but not final step toward resolving a nearly decade-old regulatory matter.
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Settlement Amount Likely at ₹1,800–1,880 Crore, Higher Than Initial Offer
NSE had originally submitted a settlement application on June 20, 2025, offering ₹1,387.39 crore. However, based on HPAC deliberations on March 27, the recommended settlement amount is estimated at ₹1,800–1,880 crore, according to officials familiar with the revised proposal.
The proposed structure includes:
- ₹1,200 crore toward disgorgement
- ₹380 crore as interest
- Balance under additional settlement terms
If approved, this would exceed the earlier ₹624.89 crore disgorgement order and rank among the largest settlements processed under SEBI’s framework.
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Final Decision Rests with SEBI’s Whole-Time Members
Following HPAC’s recommendation, the proposal has been forwarded to SEBI’s panel of two Whole-Time Members (WTMs), who have the authority to:
- Approve or reject the settlement application
- Issue a formal demand notice upon approval
As per regulatory process, settlement cases are resolved without admission or denial of guilt.
Market participants expect a final decision within the next few weeks, based on typical SEBI timelines for WTM approvals.
Co-Location Case: 2015 Allegations of Preferential Data Access
The case originated from a 2015 whistleblower complaint, alleging that certain brokers received faster access to NSE’s trading systems.
Key issues involved:
- Preferential access to tick-by-tick data feeds
- Use of specific server configurations for speed advantage
- Alleged violations of SEBI’s SECC Regulations, 2012
The controversy raised concerns around fairness and transparency in India’s largest stock exchange.
Legal History: SAT Relief and Ongoing Supreme Court Proceedings
In 2023, the Securities Appellate Tribunal reduced SEBI’s disgorgement order from ₹624.89 crore to ₹100 crore, stating the issue was a “human error” rather than fraud.
SEBI challenged this ruling before the Supreme Court of India, where the matter remains pending.
Additional developments include:
- Supreme Court directed interim refund of ₹300 crore to NSE in March 2023
- Dark fibre case penalties of ₹62.58 crore disgorgement and ₹7 crore fine were also set aside
IPO Plans Gain Momentum with Regulatory Clarity
The settlement process is crucial for NSE’s listing plans:
- SEBI issued a No Objection Certificate (NoC) on January 30, 2026
- NSE is preparing to file its DRHP within 1–2 months
- Proposed IPO size: ₹23,000 crore via Offer for Sale (OFS)
Resolution of legacy cases is considered essential for investor confidence ahead of listing.
Previous Settlement: ₹643 Crore Paid in TAP Case in 2024
NSE had earlier settled the Trading Access Point (TAP) case in 2024, paying ₹643 crore.
The case involved:
- Alleged bypass of trading access controls
- Failure to implement adequate system safeguards
- Non-reporting of a 2013 complaint to internal committees
This highlights NSE’s ongoing efforts to address regulatory concerns.
Impact on Markets and What Happens Next
The recommended settlement of ₹1,800–1,880 crore represents a significant step toward closing a long-standing issue, but final resolution depends on WTM approval.
Key implications:
- Removes a nearly 10-year regulatory overhang
- Strengthens NSE’s IPO readiness
- Provides clarity on financial liabilities
Next steps include:
- Final decision by WTMs in the coming weeks
- Payment of settlement amount upon approval
- Joint application by SEBI and NSE to withdraw the case from the Supreme Court
Until WTM approval is granted, the settlement remains proposed, not final, making the upcoming regulatory decision critical for both NSE and market participants.
