Before the IPO of the country’s largest stock exchange National Stock Exchange (NSE) is launched in the market, a very important news has come out. NSE has openly disclosed some very big legal disputes in the preliminary documents (DRHP) filed for its IPO. The exchange has decided to permanently close the old ‘co-location’ and ‘dark fiber’ cases going on with the market regulator SEBI. For this, NSE has presented a big settlement proposal to SEBI for payment of Rs 1,491.21 crore. Apart from this, a rival exchange MSEI has also filed a compensation claim of Rs 857 crore against NSE. However, this huge amount will not suddenly cause any major crisis to the financial health of NSE, because the company has already deposited a huge amount with SEBI.
What will be the actual financial burden on NSE’s pocket?
At first glance, this amount of Rs 1,491 crore appears very big, but the reality is that exchange You will not have to withdraw this entire amount in cash from your safe immediately. NSE has already deposited an amount of about Rs 1,107 crore with SEBI under various orders. This simply means that if SEBI gives final approval to this new revised settlement proposal, then NSE will have to pay only the remaining additional amount in cash. Presently all these major legal cases are pending in the highest court of the country i.e. Supreme Court.
What is this dark fiber internet speed controversy
The roots of this entire controversy are related to technology and unfair advantages. The main allegation in the Dark Fiber case was that certain trading members were given extremely fast connectivity through an unauthorized Internet service provider. By taking advantage of this high speed, those brokers used to get data in the market a few seconds earlier than ordinary investors, due to which they could earn more profits.
In this case, SEBI had ordered NSE to return Rs 62.58 crore along with interest in the year 2019 and also imposed a fine of Rs 7 crore in the year 2022. However, later the Securities Appellate Tribunal (SAT) completely canceled both these orders. After this SEBI went to the Supreme Court against this decision. Now to end this legal headache, NSE has proposed a payment of Rs 267.65 crore in March 2026.
The biggest problem is in the co-location case.
The co-location controversy is counted among the most talked about and biggest scams in the history of NSE. It was alleged that some selected brokers were given special facility to install their computer systems very close to the main server room of NSE (co-location). This enabled them to get market data before the rest of the world.
In this serious matter, SEBI had imposed a heavy fine of Rs 624.89 crore on NSE in the year 2019. In the year 2023, SAT canceled this fine and directed NSE to deposit Rs 100 crore only in the Investor Education and Protection Fund (IEPF). SEBI also challenged this relief in the Supreme Court. To permanently get rid of this big controversy, NSE has made a revised proposal to pay Rs 1,223.56 crore under the agreement in March 2026.
Old legal dispute with rival company MSEI
NSE’s legal troubles are not limited to SEBI alone. The exchange has also mentioned about its 15-year-old legal battle with the Metropolitan Stock Exchange of India (MSEI) in its IPO documents. MSEI alleges that NSE misused its strong market position in the currency derivatives segment. He deliberately kept his fees so low that healthy competition would be eliminated in the market.
In 2011, the Competition Commission of India (CCI) had held NSE guilty and imposed a fine of Rs 55.5 crore, which was also upheld by COMPAT in 2014. At present, the Supreme Court has put a stay on the recovery of this fine, but MSEI has demanded a separate compensation of Rs 856.99 crore for this business loss and 18 percent annual interest on it.
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