Understanding NSE Co-Location and Dark Fibre Cases

NSE Co-Location and Dark Fibre Cases: Key Highlights

1. What is the NSE co-location case about?

The National Stock Exchange (NSE) allowed select brokers to place their computers closer to NSE servers. This proximity gave them faster access to trading data, creating an unfair advantage. SEBI investigated and penalized NSE for this preferential treatment.

2. What is the dark fibre case about?

Dark fibre refers to private high-speed internet cables. NSE was accused of letting some brokers use these connections before they were officially available, giving them early access and an unfair trading edge over others.

3. What is NSE doing now?

NSE has approached SEBI to settle both cases under special 2018 settlement rules. This allows NSE to pay a fine and close the cases without admitting guilt.

4. How much money is involved?

NSE has already deposited ₹800 crore and may pay an additional ₹600 crore to fully settle the cases.

5. What happens after settlement?

If SEBI approves, NSE will receive a “No Objection Certificate” (NoC), clearing the way for its upcoming Initial Public Offering (IPO).

6. What is NSE’s current position?

While NSE believes it has strong legal grounds to contest the penalties, it prefers settlement to eliminate regulatory uncertainty.

7. How is NSE doing financially?

NSE posted a profit of ₹2,924 crore in the June quarter, driven by increased trading activity in both cash and derivatives markets.

Quotation

“Justice is not only about punishing the guilty, but also about ensuring fairness for all.”