In brief. For nearly a decade, the NSE "co-location" matter was treated as one of Indian securities enforcement's largest scandals: allegations that certain brokers gained unfair, ahead-of-the-pack access to tick-by-tick market data through the exchange's co-location facility, with disgorgement claims running into hundreds of crore against the exchange and several of its former executives. The actual outcome was very different. In January 2023 the Securities Appellate Tribunal set aside SEBI's principal ₹625 crore disgorgement direction, holding NSE liable only for ₹100 crore for due-diligence lapses, and ordered SEBI to re-adjudicate. On 13 September 2024 SEBI dropped the charges against NSE and its seven former executives, including Chitra Ramkrishna, Ravi Narain and Anand Subramanian, for absence of evidence of collusion or connivance with the broker, OPG Securities. A separate SEBI order directed OPG Securities to disgorge approximately ₹85 crore. The case is a study in how a high-profile market-infrastructure investigation can largely unravel on the evidentiary record.
The NSE co-location story is, in its public telling, a parable about Indian market microstructure: speed advantages worth crores, an exchange that did not police its own infrastructure properly, and brokers who allegedly got rich on the difference. Strip away the headlines and the legal arc is narrower than that. The substantive question SEBI investigated was whether NSE colluded with particular brokers to give them preferential access to the exchange's tick-by-tick data feed. The substantive answer, after years of proceedings, two SEBI orders, and an SAT remand, was that the colo facility had lapses but not provable collusion.
What was the NSE co-location case actually about?
NSE's co-location facility allowed members of the exchange, for a fee, to place their trading systems physically next to NSE's matching engine, reducing latency. The allegation, first surfaced by an anonymous whistleblower in 2015, was that the exchange's tick-by-tick data dissemination, the architecture through which traders received order-book information, was structured in a way that allowed certain brokers (most prominently OPG Securities) to connect to less-loaded secondary servers and therefore to receive market data milliseconds before other brokers. In a market where microseconds are tradeable advantages, those milliseconds were said to add up to large unfair gains.
What did SEBI's 2019 order find and direct?
In April 2019, SEBI passed a substantial WTM order in the matter directing NSE to disgorge approximately ₹625 crore with interest at 12 per cent per annum, on a finding that the exchange had failed to ensure equal and fair access to its trading infrastructure.1 The aggregate disgorgement figure ran to roughly ₹687 crore with interest. SEBI also passed related orders against the brokers and former NSE officials it considered to have benefited from or enabled the asymmetry. The order was, at the time, treated as one of the largest single market-infrastructure enforcement actions in Indian history, and it set the tone for SEBI's posture on exchange governance going forward.
How did the Securities Appellate Tribunal undo most of it in 2023?
In January 2023 the Tribunal substantially set aside SEBI's disgorgement direction. The Tribunal held that SEBI had not demonstrated, on the evidentiary record, that NSE itself had derived an unfair gain of the size the regulator had quantified.2 In place of the ₹625 crore disgorgement, the Tribunal directed NSE to pay ₹100 crore for what it described as a lack of due diligence in operating the co-location facility, and remanded the matter to SEBI for re-adjudication within four months.2 The Tribunal's order did not absolve NSE entirely of the operational failure, but it held that the leap from operational lapse to disgorgement of hundreds of crore had not been justified.
What did SEBI's 2024 re-adjudication say?
On 13 September 2024, SEBI passed its re-adjudication order and, in substance, dropped the charges against NSE and its seven former executives, including Chitra Ramkrishna, Ravi Narain and Anand Subramanian, for absence of evidence to sustain the original allegations of collusion or connivance with the broker, OPG Securities.3 SEBI acknowledged that "certain lapses" had occurred at the colocation facility, but found that no evidence supported the central allegation that NSE or its officials had colluded with OPG Securities to confer unfair advantage. The 2024 order is therefore the substantive end-state of the principal NSE-side investigation, subject to whatever further appeal SEBI may pursue.
What survived: OPG Securities and the broader principle.
What survived was the broker-side direction. In a separate order in the same matter, SEBI directed OPG Securities to disgorge approximately ₹85 crore on a finding that the broker had, in fact, gained unfair access to the secondary servers and traded on the resulting informational asymmetry.3 That direction operates independently of the NSE-side findings, because the question of whether the exchange colluded with the broker is conceptually distinct from the question of whether the broker obtained and used unfair access. SEBI was able to sustain the second finding even where it could not sustain the first.
Why does this matter for market-infrastructure regulation?
Because it draws a line. The NSE co-location matter was widely expected to settle the proposition that an exchange's operational failures, where they enable a broker's unfair advantage, automatically attract a large quantified disgorgement from the exchange itself. Both the SAT and SEBI's own re-adjudication declined to draw that proposition that broadly. The exchange was held liable for a measurable operational lapse but not for the broker's gain, in the absence of evidence connecting the two by collusion. Where market-infrastructure enforcement sits in SEBI's overall machinery is set out in How Does SEBI Actually Enforce the Law?, and the disgorgement architecture the case turned on is in Does SEBI Fine You, or Take Back What You Made?.
What does the long arc tell us about SEBI's evidentiary discipline?
That a large headline order is not the same as a large eventual outcome, and that the Tribunal and the regulator's own internal review continue to test enforcement actions for the strength of their evidentiary backing. The NSE colo arc, from a ₹625 crore disgorgement in 2019 to a ₹100 crore due-diligence direction in 2023 to a substantive dismissal of the principal charges in 2024, is one of the clearest worked examples in modern Indian securities enforcement of how the appellate and re-adjudication discipline can substantially reshape an investigation. For the empirical picture of how WTM orders typically fare across the record, see How Does India's Securities Regulator Actually Work?
Sources & citations
- SEBI Whole-Time Member, Order in the matter of National Stock Exchange of India Ltd (Co-location) dated April 2019, directing NSE to disgorge approximately ₹625 crore with interest at 12 per cent per annum (aggregate of approximately ₹687 crore with interest), on findings of failure to ensure equal and fair access at the co-location facility.
- Securities Appellate Tribunal order, January 2023, in appeals against the April 2019 SEBI order, setting aside the disgorgement direction, holding NSE liable for ₹100 crore for due-diligence lapses, and remanding the matter to SEBI for re-adjudication within four months.
- SEBI, Order in the matter of NSE and Others (Co-location) dated 13 September 2024, dropping charges against NSE and its seven former executives including Ms. Chitra Ramkrishna, Mr. Ravi Narain and Mr. Anand Subramanian for absence of evidence of collusion with OPG Securities; a separate SEBI order in the same matter directed OPG Securities to disgorge approximately ₹85 crore.
About this article. Part of Legal Wires' SEBI Enforcement series, an analytical guide to India's securities enforcement record. This is general information and commentary, not legal advice; do not rely on it for any specific matter. Prepared with AI assistance and reviewed by the Legal Wires editorial team. Where SEBI findings or appellate holdings are described, they are as recorded in the underlying orders and may be subject to further appeal. Last reviewed: 28 May 2026. Spotted an error? Tell us and we will review it.