Supreme Court Disposes SEBI-NSE Appeals After Settlement In Co-Location, P2P Connectivity Dispute

The Supreme Court has disposed of the appeals arising from the dispute between Securities and Exchange Board of India (SEBI) and National Stock Exchange Ltd (NSE) over alleged irregularities in NSE's co-location facility and Point to Point (P2P) connectivity, after the parties settled the dispute between them with NSE making the entire payment demanded by SEBI.

In its August 9, 2023 order, the Securities Appellate Tribunal (SAT) held that P2P connectivity did not provide Way2Wealth (W2W) or GKN Securities any latency advantage and that NSE had not given them preferential treatment or discriminated against other brokers. It consequently quashed the ₹62.58 crore disgorgement direction against NSE.

A division bench of Justices J.B. Pardiwala and K. Vinod Chandran disposed of the appeals after SEBI and NSE jointly informed the Court that they had settled all disputes between them. The Court kept the questions of law open while the connected appeals concerning the other respondents to continue.

The court was informed that SEBI had raised demand notices on July 30, 2026, and that NSE made the entire payment demanded by SEBI on July 31, 2026. The parties consequently stated that no further disputes survived between them.

The top court accordingly disposed of NSE and SEBI's appeals in terms of the settlement, while keeping the questions of law open. The appeals concerning the other respondents in the matter were directed to remain pending.

"In view of the aforesaid, Civil Appeal No.6471 of 2023 and Civil Appeal No.4273 of 2024 are disposed of in terms of the settlement arrived at between the NSE and the SEBI, while keeping the questions of law open.”, the court said.

The dispute arose from SEBI's action against the NSE, stockbrokers and its officials over alleged irregularities in NSE's co-location facility and Point to Pointconnectivity. SEBI had received complaints alleging that certain brokers, particularly Way2Wealth (W2W) and GKN Securities, received preferential access through P2P connectivity provided by Sampark Infotainment, an unauthorised telecom service provider.

SEBI's investigation alleged that NSE allowed Sampark to continue providing connectivity despite its licensing deficiencies, while similar requests from other brokers were denied. It further alleged that the arrangement provided W2W and GKN with an unfair latency advantage, besides alleging discriminatory site-inspection practices and collusion between NSE and the brokers.

Based on the investigation, SEBI's Whole Time Member passed a common order on April 30, 2019 imposing various directions. In NSE's case, this included disgorgement of ₹62.58 crore with interest, network audits and other regulatory measures. Several affected entities and officials challenged the order before the Securities Appellate Tribunal.

SAT examined the technical functioning of P2P connectivity and held that it did not provide a latency advantage to the brokers and that the allegations of preferential treatment and collusion against NSE could not be sustained on the evidence.

It quashed the ₹62.58 crore disgorgement direction against NSE, while sustaining certain other regulatory directions.

The appellate tribunal also quashed Chitra Ramkrishna's three year debarment, as well as the two year restraint orders against Ravi Varanasi, Nagendra Kumar, Deviprasad Singh and M.R. Shashibhushan, while observing that appropriate penalties could still be imposed for violations established against the concerned persons.

For Appellant: Senior Advocates Arvind Datar, Siddharth Bhatnagar, Advocates Anjuman Tripathy, AOR, Harshit Sethi, Anzu. K. Varkey, Mansi Tripathi, Aryaa Yadav, Abhishek Baid, Mohit Kumar Bafna, Praneet Das, Anup Jain, Ashok Kumar Jain, Expletus Legal, AOR, Rony Oommen John, AOR, Arshdeep Singh, Amay Bahri, Nadeem Afroz, Kumar Manish, Abhishek Misra, Pramod Kumar Srivastava, Deepika Mishra, AOR, Diwakar Awasthi, Divyank Dutt Dwivedi, Krishna Mohan Baitha, Aakriti Arora, Nikhil Jain, AOR

For Respondent: Senior Advocates Venkatesh Dhondh, Neeraj Kishan Kaul, Advocates Mahesh Agarwal, Sandeep Parekh,Ankur Saigal, S. Lakshmi Iyer, Chirag Nayak, Parkar Karia, Prasad Shenoy, Rishabh, E. C. Agrawala, AOR, Aman Raj Gandhi, AOR Shruti Ranjan, Vivek Shah, Suradhish Vats, Syed Jafar Alam, AOR Abhishek Baid, Mohit Kumar Bafna, Praneet Das, Anup Jain, Ashok Kumar Jain, Expletus Legal, AOR, Abhijnan Jha, AOR, Rajendra Barot, Anusha Jagadeesh, Prabhas Shroff, Sadhvi Chhabra, Harshit Jaiswal, Aashray Raina, S.S. Shroff, AOR Aashish Gupta, Puneeth Ganapathy, Aditya Kumar Singh, Nikhil Jain, AOR, AOR Mr. Arshdeep Singh, Amay Bahri, Nadeem Afroz, Shruti Rajan, Vivek Shah, Suradhish Vats, Trilegal Advocates On Record, AOR, Anand Mahadeo Sanap, Chavda Dipika Premji, Rachna Gupta, AOR Kumar Manish, Abhishek Misra, Deepika Mishra, AOR Ghansyam Singh, Aakriti Arora, Krishna Mohan Baitha