The Securities and Exchange Board of India (SEBI) has been given two months by the Securities Appellate Tribunal (SAT) to reply to a plea filed by the National Stock Exchange (NSE) against the Rs 1,100 crore penalty imposed. The SAT had directed the exchange to transfer Rs 625 crore to the SEBI in two weeks and had stayed the capital market regulator's order till further instructions in its May 22 order. Earlier, the NSE had challenged SEBI's orders in the co-location case before SAT and it had argued that that SEBI's order is unsustainable, arbitrary and disproportionate. The appellate tribunal will hear the case on September 18. It may be recalled that it April, SEBI had directed the NSE to pay over Rs 1,100 crore for favouring a few brokers to make illegal gains by using unauthorised trading software and networks in the same room where the exchange's main trading servers were located. NSE was directed to deposit the amount to an investor protection fund in 45 days.