SEBI and NSE Settlement Overview
The Securities and Exchange Board of India (SEBI) has given its in-principle approval to the settlement applications filed by the National Stock Exchange (NSE) concerning issues in co-location and dark fibre matters. This step is anticipated to expedite the approval of NSE's pending initial public offering (IPO) application.
Details of the Settlement
- The settlement is currently under review by various committees within SEBI.
- NSE submitted two settlement applications totaling Rs 1,387.39 crore for the co-location and dark fibre cases.
- Provision of Rs 1,297.41 crore was set aside for these matters in the quarter ending September 30, 2025.
Co-Location and Dark Fibre
- A co-location facility provides data center services to stock brokers.
- Dark fibre refers to unused optical cables that can be leveraged for faster data transmission.
Allegations and Regulatory Actions
- Allegations emerged of preferential access being given to certain brokers via co-location and dark fibre.
- The issue was initially highlighted by a whistleblower in January 2015.
Future Regulatory Developments
- Pandey indicated potential for SEBI to issue an IPO no-objection certificate to NSE soon.
- SEBI is in discussions with the Ministry of Corporate Affairs regarding regulation of the unlisted share market.
- The unlisted share market lacks oversight and is generally traded over-the-counter among small investor groups.
Concerns and Expectations
- Recurring gaps in IPO offer document disclosures were noted, affecting transparency and understanding.
- SEBI expects clear disclosures on capital structure, business model, and revenue and cost drivers.
