NSE’s Settlement Move Paves Way for Long‑Delayed IPO

The National Stock Exchange’s long‑pending initial public offering has moved a step closer, with the Securities and Exchange Board of India granting in‑principle approval to settle the co‑location and dark fibre disputes. The cases, which have weighed on the exchange’s listing prospects for nearly a decade, must now be placed before the Supreme Court due to ongoing litigation.

SEBI’s approval follows a settlement proposal worth ₹1,388 crore submitted by NSE under existing settlement regulations. Once the legal and regulatory formalities conclude, NSE may finally resume work on refiling its draft prospectus.

SEBI Clears Settlement Framework for High‑Profile Disputes

SEBI has provided in‑principle clearance for NSE’s proposal to settle the co‑location and dark fibre matters for ₹1,388 crore. The disputes have historically centred on allegations of preferential access and latency advantages in NSE’s trading infrastructure.

The settlement is expected to help resolve one of the largest regulatory overhangs in the Indian capital market. As per procedure, the settlement does not include any admission of wrongdoing by NSE, reflecting SEBI’s established framework for negotiated resolutions.

Internal Review Committees to Examine Proposal Before Final Order

The settlement proposal will now undergo scrutiny by SEBI’s Internal Committee and High‑Powered Advisory Committee. These panels will evaluate the terms before the matter is placed before the whole‑time members for a final decision.

Once NSE pays the settlement amount, SEBI is anticipated to issue a closure order as required under its settlement regulations. This phased review structure ensures that settlement terms meet regulatory standards while maintaining procedural transparency.

Supreme Court Approval Required Due To Pending Litigation

Because SEBI has already challenged an earlier SAT ruling in the Supreme Court, the settlement cannot proceed without judicial oversight. Under settlement rules, when proceedings are pending before a court, both SEBI and the settling entity must place the agreement before the relevant court.

The Supreme Court will determine whether the settlement aligns with legal requirements and public interest before closing the matter. This step safeguards compliance with due process and ensures clarity on regulatory interpretation.

Procedural Roadmap Ahead for NSE’s Listing

Once the Supreme Court issues its closure order, NSE will be allowed to refile its draft red herring prospectus. The exchange will then undergo SEBI’s disclosure review under the ICDR framework, which governs public issues.

It will also need to secure in‑principle listing approval, likely from BSE, before initiating the book‑building process. These steps collectively mark the final approach toward India’s most anticipated exchange listing in years.

Read More: SEBI Proposes ₹20,000 Crore AUM Threshold for Regulation of Market Indices.

Conclusion

NSE’s proposed ₹1,388 crore settlement marks a significant milestone in resolving long‑standing regulatory disputes tied to its co‑location and dark fibre cases. With SEBI’s in‑principle approval secured, the matter now awaits Supreme Court scrutiny due to existing appeals.

Following judicial closure, NSE can begin the formal process of refiling its IPO documents and completing the required regulatory checks. The settlement thus serves as a crucial turning point in the exchange’s progress toward its long‑delayed public listing.

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