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SEBI Gives In-Principle Approval to NSE’s Co-Location and Dark Fibre Settlements

What happened: SEBI has, in-principle, accepted the settlement applications filed by the NSE for co-location and dark fibre cases. Why it matters now: This clears...

Jan 16
2 min read
SEBI Gives In-Principle Approval to NSE’s Co-Location and Dark Fibre Settlements

  • What happened: SEBI has, in-principle, accepted the settlement applications filed by the NSE for co-location and dark fibre cases.

  • Why it matters now: This clears a major regulatory hurdle for NSE’s long-awaited IPO, potentially fast-tracking its launch.

  • What changes for people: Investors may soon get access to NSE shares once the IPO is approved, and market fairness concerns could be formally addressed.

  • Who is affected: NSE, stock brokers, retail and institutional investors, and the broader capital market ecosystem.

The Securities and Exchange Board of India (SEBI) has signaled agreement to the National Stock Exchange’s settlement applications in the high-profile co-location and dark fibre cases, according to Chairman Tuhin Kanta Pandey. The move is expected to accelerate NSE’s IPO approval, which has been pending for years.

The co-location facility allows stock brokers to place servers in the exchange’s data centers, while dark fibre refers to passive optical cables that can provide faster data transmission. NSE had faced allegations that some brokers received preferential access, giving them split-second advantages in trading. The matters were first highlighted by a whistle-blower in 2015.

Settlement details
NSE had filed two settlement applications totaling ₹1,387.39 crore, with provisions of ₹1,297.41 crore already set aside in its accounts for the September 2025 quarter. Pandey confirmed that while the settlements are still under committee review, SEBI is aligned with the principles of the proposed resolution.

Broader market implications
The SEBI Chairman also noted that the regulator is exploring ways to bring unlisted shares under oversight in consultation with the Ministry of Corporate Affairs. Currently, unlisted shares—traded over-the-counter before a company’s IPO—remain largely unregulated, creating a “grey area” in India’s capital markets.

Pandey emphasized the importance of clear disclosures in IPO documents, highlighting recurring gaps in capital structure explanations, preferential allotments, and revenue models that can delay fund-raising and impact investor trust.