NSE Vice Chairman Ravi Narain had put in his papers amid regulators intensifying their probe into alleged lapses in high-frequency trading offered through the exchange's 'co-location' facility.
The role of some top officials including Narain, who is also an ex-CEO of the bourse, is also being looked into by markets regulator Sebi.
Sources said Narain stepped down as Vice Chairman to ensure that Sebi is able to take appropriate steps in the co- location case in a fair manner.
He has taken the decision keeping in mind best corporate governance practices, they added.
The Finance Ministry is also keeping a "close watch" on the case and wants Sebi to fast-track the investigations as it involves the country's largest stock exchange in terms of turnover and may have a bearing on the overall market sentiment, sources had earlier said.
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