Compat upholds CCI order imposing Rs 55.5 crore fine on NSE

New Delhi: The Competition AppellateTribunal on Tuesday upheld an order passed against National StockExchange by fair trade regulator CCI, which had found thebourse guilty of abusing its dominant market position incurrency derivatives segmentand had fined it Rs 55.5 crore.

Reacting to the order, passed yesterday morning after a nearly3-year-long hearings on NSE’s appeal, the exchange said thatit would appeal against the decision and “whatever it has donewas in the interest of the development of the capitalmarkets”.

In May 2011, the competition watchdog had found NSEguilty of abusing its dominant market position and adoptingunfair trade practices in currency derivatives trading.

[caption id=“attachment_92798” align=“alignleft” width=“380”] Representational image[/caption]

A month later, CCI also imposed a fine of Rs 55.5 croreon the country’s leading bourse for abusing its dominant market position, and asked it to stop unfair trade practices.

At that time, it was the CCI’s first major penalty againstanti-competition practices.

Subsequently, NSE challenged CCI order before theCompetition Appellate Tribunal (Compat), which granted a stayin September 2011. However, the Tribunal has now decided touphold the CCI order.

In a statement, the exchange said: “NSE will appeal theorder of Compat and we will do the needful after going throughthe detailed order. Whatever we have done was in the interestof the development of capital markets.

“A suitable review of the implications will be done indue course.”

While the exchange did not specify further details on itsnext course of action, sources said that the appeal was likelyto be filed in the Supreme Court.

Pronouncing NSE guilty of abusing its dominant marketposition in a 170-page order in June 2011, the CCI had alsoasked the country’s largest stock exchange to immediatelystop subsidising its services.

The CCI order followed a months-long probe by it in thematter, which began after a complaint from NSE’s younger rivalMCX-SX.

MCX Stock Exchange (MCX-SX) had accused NSE of abusingits dominant market position to corner business in the CDsegment.

CCI in its order had also directed the NSE to “cease anddesist from unfair pricing, exclusionary conduct and unfairlyusing its dominant position in other markets to protect therelevant CD (currency derivative) market with immediateeffect.”

The final order from CCI followed a majority order passedby the Commission on 25 May, 2011, along with which it hadissued a notice to the bourse before quantifying the penalty.

The first order was passed with a majority vote offive members of the seven-member commission, while the final
order was also been passed with 4-2 majority.

Two members had dissented with the majority order, whichfound NSE guilty of abusing its market dominance and followingunfair trade practices in the currency derivatives market.

PTI