India’s NSE Sets Aside $148 Million to Settle Pending Regulatory Cases

Key Takeaways

• NSE Sets the Stage for Settlement: India’s National Stock Exchange has earmarked $148 million (₹13 billion) to settle long-pending regulatory cases with SEBI, a move widely seen as clearing the path for its long-awaited IPO.
• Years of Scrutiny Nearing Resolution: The exchange has been under the regulator’s lens since 2019, when it was fined $125 million (₹11 billion) for giving unfair access to certain traders. The latest provision signals an end may finally be in sight.
• Profit Slide Reflects Softer Trading: Quarterly profit dropped 33 percent to $239 million (₹20.98 billion) as trading activity cooled and transaction revenue fell 12 percent.
• Derivatives Frenzy Cools: With SEBI tightening rules to curb speculative trading, average daily volumes for equity options slipped 16 percent, tempering India’s recent derivatives boom.

Deep Dive

India’s National Stock Exchange (NSE) has set aside nearly $148 million (₹13 billion) to resolve regulatory cases pending with the Securities and Exchange Board of India (SEBI), according to a Reuters report. The move signals a potential breakthrough in the exchange’s years-long effort to move ahead with a long-delayed initial public offering.

The provision marks NSE’s first-ever financial recognition tied to its ongoing legal disputes. In its second-quarter results for fiscal 2026, the Mumbai-headquartered exchange said it had filed two separate settlement applications amounting to $158 million (₹13.87 billion) to address outstanding cases.

NSE, the world’s most active derivatives exchange, has been embroiled in litigation with SEBI since 2019, when it was fined $125 million (₹11 billion) for failing to provide equal access to all trading members. The legal battle has been one of the biggest obstacles to its IPO ambitions, which have been stalled since the exchange first sought to list in 2016. Its smaller domestic rival, BSE Ltd, went public in 2017.

Despite the progress toward settlement, NSE’s latest earnings reflected a challenging quarter. The exchange reported a consolidated net profit of $239 million (₹20.98 billion), a 33 percent decline from $358 million (₹31.37 billion) a year earlier, driven by lower trading volumes. Revenue from transaction charges fell 12 percent quarter-on-quarter to $318 million (₹27.85 billion), as activity slowed across both cash and derivatives markets.

The SEBI’s recent efforts to cool India’s booming derivatives market have led to a noticeable drop in options trading. NSE said the average daily trading volume for equity options, measured by premium, was  $5.31 billion (₹464.42 billion), down 16 percent from the previous quarter.

The exchange’s move to set aside funds for settlement could help clear a major overhang that has long clouded its public listing prospects. If approved by regulators, the resolution would mark a significant step toward restoring market confidence in the governance of India’s most important financial exchange.

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