MUMBAI - India's market regulator on Sunday approved the appointment of Ashish Kumar Chauhan as the next chief executive of the National Stock Exchange of India (NSE), the country's top bourse said in a statement.

The NSE, launched in 1994, says it is the world's biggest derivatives exchange in terms of total number of contracts traded.

Chauhan's appointment comes at a time when the NSE is dealing with a regulatory probe in a case concerning governance lapses, a major setback for the exchange that has struggled to roll out its IPO for years. He is one of the founders of the NSE, where he worked from 1992 to 2000.

Last week, federal authorities arrested Chitra Ramkrishna, a former CEO and MD of NSE as part of an ongoing probe that has extended to suspected phone tapping at the bourse. Ramkrishna was also arrested in March in connection to NSE governance lapses.

Ramkrishna's lawyers have denied some of the allegations against her, while the NSE has denied any wrongdoing.

Chauhan presently serves as the managing director and chief executive officer at BSE Ltd, Asia's oldest stock exchange. He will be taking over from Vikram Limaye. No specific date was provided when Chauhan would take over as CEO.

(Reporting by Abhirup Roy, Writing by Rupam Jain; Editing by Hugh Lawson)