Mumbai, July 20: The National Stock Exchange (NSE) today knocked on the doors of market regulator Sebi, seeking to settle the co-location case through the consent mechanism.

"The exchange has filed an application today with Sebi for settlement of the co-location issue under the consent process...under the settlement regulations of Sebi," the NSE said in a statement.

This move comes just days after Vikram Limaye took over as the managing director and chief executive of the bourse.

After taking charge, Limaye had said that his priority was to resolve some of the regulatory issues and then move ahead with the NSE's initial public offering (IPO).

"My immediate priorities will be to focus on some of the regulatory issues facing the NSE. Obviously, the IPO is an important priority for me but that would happen only once all the regulatory issues are sorted out," Limaye had said.

Under the consent mechanism, entities can seek to settle cases with Sebi after payment of certain charges and other expenses, without admission of guilt.

Though expected, the NSE's move comes at a time the market regulator has stepped up its probe into the alleged lapse in high-frequency trade offered through the bourse's co-location facility. This has impacted its IPO process as Sebi is yet to give its approval.

The co-location case relates to some brokers allegedly getting preferential access through the NSE's co-location facility, early login and access to the "dark fibre" - which can allow them a split-second faster access to data feed of the exchange. Even a split-second faster access can yield huge gains for a trader.

It was first brought to the notice of Sebi by a whistleblower in 2015.

The market regulator has been looking to complete its probe at the earliest.

Sebi has reportedly directed that all revenues from the co-location facility, including the transaction charges on the trade executed through the facility, be placed in a separate bank account.

The watchdog is also looking into the role of some top NSE officials in the matter.

The NSE had filed for IPO last December but regulatory approval had been hanging fire because of the ongoing probe into co-location.

It is expected that around Rs 10,000 crore will be raised through the proposed IPO.

The IPO for over 11.14 crore shares - which is 22.5 per cent of the total shares outstanding - is an offer for sale by its existing shareholders, according to the draft red herring prospectus filed with the regulator.

Of the total shares on offer, around a 15.8 per cent stake will be tendered by foreign shareholders and a 6.7 per cent by domestic entities.