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The National Stock Exchange (NSE) on Thursday approached the Competition Appellate Tribunal against a Competition Commission of India's (CCI) order that pronounced it guilty of abusing market dominance in currency futures segment and imposed a fine of Rs 55.5 crore on the bourse.
According to sources, NSE has told the tribunal that the order from CCI was ‘antithetical' or contradictory to the principal purpose of the Competition Act, which was to protect and promote consumer welfare.
CCI, in its order on June 23, had imposed a fine of Rs 55.5 crore on NSE for abusing its dominant market position.
In addition, the NSE has been directed to “cease and desist from unfair pricing, exclusionary conduct and unfairly using its dominant position in other markets to protect the relevant currency derivatives market with immediate effect.”
The CCI has also asked the bourse to maintain separate accounts for each segment with effect from April 1, 2012.
The CCI order follows a complaint filed by MCX-SX, which had accused the NSE of abusing its dominant market position to corner business in the segment.
The NSE has said that the Competition Act did not envisage low price, which is not predatory, as an abuse of dominance, the sources added.
Prays for relief
According to sources, the NSE has prayed for a relief from the tribunal on penalty (of Rs 55.5 crore), requirement of maintaining segmented accounts and from any compensation claims that might be filed by any other third party.
In its appeal, the NSE said, it was forced to announce charges in currency derivatives segment after the CCI order and there were indications that its two rivals, MCX-SX and United Stock Exchange, would also levy charges.
NSE started levying charges for currency derivatives trading from August 22. The move has already resulted in drop in trading volumes in currency derivative segment, the sources added.
Meanwhile, the MCX-SX welcomed the NSE's move to impose transaction charges.
“This is a very positive development for the currency derivatives market and would encourage healthy competition. We welcome this move by NSE to implement the decision of CCI,” the MCX-SX MD and CEO, Mr Joseph Massey, said.
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