The Securities and Exchange Board of India (SEBI) has received a recommendation from its high-powered advisory committee (HPAC) to approve the National Stock Exchange’s (NSE) settlement application related to the co-location and dark fibre cases. According to sources, the NSE submitted its settlement application on June 20, 2025, offering a payment of ₹1,387.39 crore. However, the committee appears to be considering a higher amount, approximately ₹1,880 crore, addressing both the co-location and dark fibre issues.
A person familiar with the matter stated, “The recommendation has come through, and the matter is now with the competent authority,” indicating that the proposal has advanced to SEBI’s whole-time members for final approval. This step marks a significant progression in the settlement process.
Once approved, it is expected that SEBI will issue a demand notice, paving the way for both SEBI and NSE to approach the Supreme Court of India to withdraw any pending appeals related to the case.
Access Allegations
The co-location case involves allegations that certain brokers were granted preferential access to the NSE’s trading systems, allowing them faster access to market data. This issue has faced regulatory and judicial scrutiny for several years, with proceedings taking place in various appellate and judicial forums.
The latest developments are especially relevant considering NSE’s plans for a public listing. On January 30, 2026, SEBI issued a no-objection certificate permitting the exchange to proceed with its initial public offering (IPO), contingent upon disclosures regarding ongoing legal matters.
IPO Mandate
In March, NSE appointed 20 banks as merchant bankers for its IPO. Sources close to the preparations reported that the exchange aims to file its draft red herring prospectus after releasing its financial results, targeting a timeline in May.
Additionally, NSE has approached existing shareholders to assess their interest in participating in the offer for sale. If the co-location settlement is approved, it would represent one of the most substantial payouts in India’s securities market, potentially facilitating NSE’s long-delayed listing plans.
The exchange’s listing has faced postponements for years due to regulatory challenges linked to the co-location controversy. Industry participants emphasize that resolving these cases is crucial for regulatory compliance and enhancing governance perception, which is essential for encouraging investor participation in what is anticipated to be a closely monitored public offering.
Published on April 22, 2026.
