The National Stock Exchange of India (NSE) has agreed to pay ₹40.35 crore to the Securities and Exchange Board of India (SEBI). This payment is part of a settlement in a case involving the sharing of confidential company data with an outside vendor.
SEBI stated on Friday that this move ends its regulatory action against NSE in the case. However, NSE has not admitted to any wrongdoing. This settlement may help the exchange move forward with its delayed plans to go public.
The issue came to light during SEBI’s inspection of NSE operations between February 2021 and March 2022. During this period, NSE allowed a third-party vendor to store trade data even though there was no formal contract in place.
SEBI found that NSE shared sensitive corporate information with its own data subsidiary, its Data & Analytics Ltd (NDAL). NDAL then passed this data to its clients. The organisation published the information internally before posting it on NSE’s website.SEBI said this violated market rules, including the Insider Trading Regulations of 2015.
This meant some clients got early access to price-sensitive corporate news before it became public. SEBI viewed this as a serious governance lapse. The market regulator also raised concerns about how NSE’s internal committees were waiving penalties without proper approvals. Additionally, NSE allowed changes to client codes between unrelated institutional clients without enough checks.
NSE submitted a voluntary settlement request to SEBI. It offered to pay ₹40.35 crore and also agreed to some non-financial conditions. These include conducting a full system audit and filing a compliance report.
The NSE said, after an internal review, that the board or the organisation’s top leadership made the decisions that led to the violations. It claimed that no single officer was responsible for the errors.
The settlement ends SEBI’s current action. However, the regulator made its stance clear. It can reopen the case if new evidence comes up. SEBI can also act again if it finds false information in the proceedings.
NSE has recently faced several compliance challenges, and this settlement is one of them. Still, resolving this case may help restore some market confidence. The exchange is preparing for its long-awaited public listing. Although this closes one chapter, SEBI said it can reopen the case. It will do so if it finds new issues or any misrepresentation by NSE during the settlement.