NSE reaches Rs 40 crore settlement with Sebi over data disclosure case
Aug 1, 2025
Synopsis
The National Stock Exchange of India has agreed to pay Rs 40.35 crore to settle charges related to the indirect sharing of confidential information on listed companies with a third-party vendor, the Securities and Exchange Board of India (Sebi) said on Friday.
The National Stock Exchange of India has agreed to pay Rs 40.35 crore to settle charges related to the indirect sharing of confidential information on listed companies with a third-party vendor, the Securities and Exchange Board of India (Sebi) said on Friday, a move that could help revive the exchange’s long-delayed plans for a public listing.
The settlement ends regulatory proceedings against the exchange without admission of guilt, in a case that had raised concerns over governance lapses at one of India’s most influential market institutions.
The case relates to multiple governance lapses identified during a regulatory inspection for the period between February 2021 and March 2022. Sebi found that NSE, in the absence of a binding contract, had outsourced storage of historical trade data to a third-party vendor and permitted the transfer of sensitive information to a data subsidiary, which further disseminated it to external clients. This setup, according to Sebi, enabled clients to receive unpublished price-sensitive announcements before they were made public.
In its order dated July 31, Sebi noted that NSE’s system architecture “enabled it to send unpublished price sensitive corporate announcement(s) to the clients of NDAL (NSE Data & Analytics Limited) prior to hosting the same on its website,” in violation of several market regulations, including the Sebi (Prohibition of Insider Trading) Regulations, 2015.
The exchange also drew regulatory scrutiny for internal governance issues, including the ability of a committee to waive penalties without requisite approval and lack of due diligence in permitting client code modifications between unrelated institutional clients.
NSE filed a suo-motu settlement application under Sebi’s Settlement Proceedings Regulations, proposing the Rs 40.35 crore payment and agreeing to non-monetary terms including a system audit and compliance report. A subsequent internal review conducted by NSE concluded that the violations stemmed from decisions taken at the organisational or board level, and no individual officer was held accountable.
The settlement brings partial closure to one of several regulatory run-ins NSE has faced in recent years, though Sebi has retained the right to reopen the case if future violations or misrepresentations come to light.
The exchange, which remains under regulatory scrutiny in other high-profile cases including those related to co-location and dark fibre access, has said it awaits Sebi’s response on separate settlement applications filed in those matters.
NSE IPO
The latest resolution could smoothen the path for NSE’s long-stalled initial public offering (IPO). India’s largest stock exchange and the world’s busiest derivatives bourse has been trying to go public since 2016 to facilitate exits for several early investors. The process has been repeatedly delayed due to Sebi’s ongoing investigations, including a Rs 1,100 crore penalty imposed in 2019 over its failure to ensure fair access to its trading systems.
As of last check, NSE’s shares were trading at Rs 2,255 apiece in the unlisted market, reflecting sustained investor interest despite regulatory overhangs.
[The Economic Times]
