NSE reaches Rs 40 crore settlement with Sebi over data disclosure case

The National Stock Exchange of India has agreed to pay Rs 40.35 crore to settle charges related to the indirect sharing of confidential information on listed companies with a third-party vendor, the Securities and Exchange Board of India (Sebi) said on Friday.

The settlement ends regulatory proceedings against the exchange without admission of guilt, in a case that had raised concerns over governance lapses at one of India’s most influential market institutions.

The case relates to multiple governance lapses identified during a regulatory inspection for the period between February 2021 and March 2022. Sebi found that NSE, in the absence of a binding contract, had outsourced storage of historical trade data to a third-party vendor and permitted the transfer of sensitive information to a data subsidiary, which further disseminated it to external clients. This setup, according to Sebi, enabled clients to receive unpublished price-sensitive announcements before they were made public.
In its order dated July 31, Sebi noted that NSE’s system architecture “enabled it to send unpublished price sensitive corporate announcement(s) to the clients of NDAL (NSE Data & Analytics Limited) prior to hosting the same on its website,” in violation of several market regulations, including the Sebi (Prohibition of Insider Trading) Regulations, 2015.