SEBI's NOC for NSE's Street Plan Expected Within a Month

Breakthrough in NSE Listing Impasse May Be Near as SEBI Considers NOC or Settlement

A long-standing deadlock between India’s largest stock exchange, the National Stock Exchange (NSE), and the market regulator over the exchange’s long-pending public listing appears to be inching toward resolution. The possibility of a breakthrough has buoyed investor sentiment, sending NSE’s unlisted shares soaring by 23% in the grey market over the past two weeks.

According to two individuals familiar with the matter, the Securities and Exchange Board of India (SEBI) may grant a no-objection certificate (NOC) for NSE’s initial public offering (IPO) within weeks, potentially ending years of litigation and regulatory stalemate.

Two options are under active discussion, the people said on condition of anonymity. The first involves SEBI issuing the NOC with a condition: that NSE includes enhanced disclosures in its Draft Red Herring Prospectus (DRHP), particularly related to ongoing legal proceedings.

“This would follow standard capital markets practice—investors would be informed of the risks, which they would then evaluate,” one of the individuals noted.

The second option being explored is an out-of-court settlement, where NSE would pay a settlement fee in exchange for SEBI withdrawing pending cases.

Among the key legal disputes is the so-called "dark fibre" case. This pertains to allegations that certain high-frequency traders (HFTs) were given unfair access to NSE’s co-location servers between 2010 and 2014 via faster, private communication lines—dark fibre—that allowed them to execute trades ahead of others.

In April 2019, SEBI ordered NSE to disgorge ₹162.58 crore in alleged ill-gotten gains and barred senior officials from holding market-related positions. A further penalty of ₹17 crore imposed in 2022 was later overturned by the Securities Appellate Tribunal (SAT), prompting SEBI to challenge the decision before the Supreme Court in September 2023 and again in February 2024. The appeals are still pending.

“There are over 100,000 investors in NSE right now. An IPO is inevitable—it's just a matter of when the ongoing discussions bear fruit,” the second person added.

Unlike typical corporations, exchanges such as NSE, classified as market infrastructure institutions, face stricter regulatory scrutiny, making the path to IPO more complex. However, with both parties exploring ways forward, a long-awaited listing could soon become a reality.

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