The Supreme Court of India has dismissed appeals filed by the Securities and Exchange Board of India (SEBI) against the National Stock Exchange (NSE) in connection with the exchange's controversial co-location and dark-fibre cases. The ruling removes a significant legal hurdle that had delayed NSE's long-awaited Initial Public Offering (IPO) for several years.
The litigation originated from allegations that certain brokers received preferential access to NSE's trading systems through co-location facilities and dark-fibre connectivity, enabling faster access to market data. SEBI initiated enforcement proceedings, alleging that NSE had failed to exercise adequate due diligence in maintaining fair and transparent market infrastructure.
In 2019, SEBI passed orders against the exchange. Subsequently, the Securities Appellate Tribunal (SAT) granted relief to NSE in 2023, prompting SEBI to challenge the decision before the Supreme Court.
Recent developments saw NSE and SEBI move toward a settlement framework, with NSE agreeing to pay approximately ₹1,491 crore to resolve various regulatory proceedings. Following the regulator's in-principle acceptance of the settlement, the Supreme Court dismissed SEBI's appeals, effectively bringing the dispute to a close.
The judgment removes one of the final legal and regulatory impediments to NSE's public listing. The exchange had already filed draft IPO documents and commenced investor outreach activities. Market observers expect the offering to rank among the largest IPOs in Indian corporate history.
The decision is viewed as a significant milestone for India's capital markets, providing regulatory certainty and enabling the country's largest stock exchange to move forward with its public market debut after nearly a decade of delays.