The Supreme Court on Thursday (September 3, 2026) disposed of a batch of appeals filed by the Securities and Exchange Board of India (SEBI) against the National Stock Exchange (NSE) in the co-location and dark fibre cases, following a settlement of nearly ₹1,500 crore between the market regulator and the exchange.
A Bench of Justices J.B. Pardiwala and K. Vinod Chandran was hearing SEBI’s appeals against orders of the Securities Appellate Tribunal (SAT) setting aside disgorgement directions issued by the regulator against the NSE in the two cases. The Bench disposed of the appeals after taking note of the settlement between the parties.
In July, SEBI had accepted two settlement applications filed by the NSE for an aggregate amount of about ₹1,492 crore. Of this, about ₹1,224 crore pertained to the co-location case, while ₹268 crore related to the dark fibre case, also known as the leased-line connectivity case.
The cases stem from allegations that certain brokers were given preferential access to the NSE’s trading systems through its co-location facility, potentially allowing them to receive market data ahead of others. The allegations of unfair access first surfaced following a whistle-blower complaint in January 2015.
Co-location allows brokers to place their computer servers at an exchange’s data centre, reducing the time taken to receive market data and execute trades. Dark fibre refers to dedicated optical fibre connectivity that can facilitate faster transmission of data between two point.
In the main co-location case, SEBI had in 2019 directed the NSE to disgorge ₹625 crore, along with 12% annual interest from April 1, 2014. The regulator had alleged that the exchange provided preferential connectivity to select brokers accessing its tick-by-tick data dissemination servers, giving them an advantage over other market participants.
The NSE challenged the order before the SAT, which subsequently set aside SEBI’s disgorgement direction. The market regulator then approached the apex court against the appellate tribunal’s ruling.
In a separate order in 2019, SEBI directed the NSE to disgorge ₹62.6 crore, along with 12% annual interest from September 11, 2015, in the dark fibre case.
The regulator had alleged that the NSE gave preferential treatment to two brokers by allowing them to use the services of an unlicensed telecom vendor to establish point-to-point connectivity between their co-location racks at the NSE and the BSE.
SAT subsequently quashed the disgorgement direction in this case as well, prompting SEBI to challenge the ruling before the Supreme Court.
The two appeals have now been disposed of following the settlement between SEBI and the NSE.
The settlement comes as the country’s largest stock exchange prepares for its stock-market debut, nearly a decade after it first sought to list its shares, with its plans having faced prolonged regulatory hurdles. The proposed initial public offering (IPO) is expected to raise around ₹30,000 crore, which would make it one of the largest IPOs in India’s capital market history.
