JOIN USApparently, this is the first of its kind setting a precedent as CCI asked NSE to pay the penalty a sum equal to five (5) per cent of the average annual turnover of the exchange for last three years and further it has been asked to cease acting in an unfair manner, it is learnt.
NSE said it will decide its future course of action on the issue after studying the legals aspects. “We are reviewing the 4-2 majority CCI’s order. We will consider our future course of action after reviewing the order and obtaining the opinion of our legal advisors,” NSE said.
After CCI becoming operational, this is the first case where a watchdog body has passed an order involving such quantum of penalty. Also, the CCI order asked NSE to cease subsidising its currency derivatives operations.
Industry observers maintain that one option NSE may pursue is moving to Competition Appellate Tribunal, but no confirmation was forthcoming from NSE in this context.
It may be noted that CCI had in a majority order dated May 25, 2011 held that the NSE had contravened certain provisions of Section 4 of the Competition Act and enjoyed a dominant position in the currency derivatives segment contrary to the Director General’s (DG’s) finding that NSE was dominant in the entire stock exchange.
HKowever, two members of the 7-member commission, namely Anurag Goel and Geeta Gouri dissented the order on grounds that NSE is not dominant in the currency derivatives market and zero price set by it cannot be said to be unfair or predatory as it did not set zero prices with the intention of reducing competition or eliminate competitors. CCI has reportedly fixed the penalty to be imposed on NSE a month after having found the bourse guilty of abuse of dominant position in a dispute with MCX-SX.