The National Stock Exchange (NSE) has agreed to pay ₹40.35 crore to settle charges of indirectly sharing sensitive, unpublished information with external parties with SEBI.

The settlement, by neither “admitting nor denying the findings of facts and conclusions of law,” could help the country’s largest stock exchange move closer to reviving its long-pending IPO plans.

The case involves the sharing of confidential company announcements before they were made public. SEBI found that between February 2021 and March 2022, NSE allowed sensitive data to be passed on to a third-party vendor and its subsidiary, NSE Data & Analytics (NDAL), without a formal agreement in place. This subsidiary then disseminated the data to its clients, violating insider trading rules.

The settlement order said that the system architecture at NSE enabled NDAL clients to access price-sensitive announcements ahead of their public release on the exchange’s website. This breached multiple norms, including the Prohibition of Insider Trading Regulations, 2015.

Governance issues

SEBI also flagged other governance issues, such as a committee’s power to waive penalties without proper approvals, and lapses in overseeing client code modifications between unrelated institutional investors.

NSE filed a suo motu settlement application and proposed the ₹40.35-crore payment along with non-monetary terms such as a system audit and a compliance report. An internal review by the exchange attributed the lapses to broader organisational decisions and clarified that no individual was personally accountable.

While the settlement resolves this specific case, SEBI has retained the right to reopen it if any misrepresentation or future violations are found. NSE continues to face scrutiny in other ongoing and bigger matters, including cases related to co-location and dark fibre access. The stock exchange has filed separate settlement applications in those cases on June 20, and is awaiting the regulator’s decision.

Published on August 1, 2025