NSE pays ₹40.35 crore to settle inspection case with SEBI ahead of its proposed IPO

The National Stock Exchange (NSE) has settled a series of its minor cases with the Securities and Exchange Board of India (SEBI), according to SEBI’s settlement order passed on July 31. As per the settlement, NSE will pay ₹40.35 crore to SEBI, and the market regulator won’t initiate any enforcement action against the exchange. 

NSE has also proposed to settle without admitting or denying SEBI’s findings about the case. This comes just a month after the NSE filed for settlement in pending co-location and dark fibre cases. 

“The High-Powered Advisory Committee (hereinafter referred to as ‘HPAC’), in its meeting held on February 5, 2024, considered the settlement terms proposed by the applicant and recommended that the case may be settled upon payment of Rs 40,35,00,000 (Rupees Forty Crore Thirty-Five Lakhs only), subject to the applicant complying with the non-monetary terms specified by the Internal Committee (IC),” the settlement order stated.

The cases are related to some activities undertaken by the NSE, problems with client code modifications, sharing of unpublished price-sensitive corporate announcements, and shortcomings regarding the review of error trades, among other things. The settlement order follows the findings of an inspection that took place between February 1, 2021, and March 31, 2022.

As per the order, NSE allowed a third-party vendor to store media tapes that contained historical trade data without a legally binding written contract.

Further, the NSE outsourced and shared confidential, price-sensitive data of listed companies with NSE Data and Analytics Limited (NDAL), which then shared it with a third-party vendor without a legal agreement. 

SEBI also said that the NSE permitted client code modifications for trades between unrelated institutional clients without proper due diligence. Many other such limitations were found on the NSE’s end. 

“Upon consideration of the aforesaid submissions of the Applicant by the Panel of Whole Time Members and acceptance of the same in terms of Regulation 15 of the Settlement Regulations on June 16, 2025, a Notice of Demand for ₹40,35,00,000 (Rupees Forty Crore Thirty Five Lakhs only) was issued to the Applicant on June 18, 2025. The  Applicant vide email dated June 25, 2025, informed about the remittance of the aforesaid settlement amount, and SEBI has confirmed credit of the same,” the order read. 

The case has been settled with immediate effect.  

“This Settlement Order is passed on this 31st day of July, 2025, and shall come into force with immediate effect,” SEBI added. 

On June 20, NSE filed a consent application to settle its long-pending co-location and dark fiber case with the market regulator to get a No Objection Certificate (NOC) for its proposed IPO. The application is currently under review, and a settlement might be announced soon.