New Delhi: The Competition Appellate Tribunal today upheld an order passed against National Stock Exchange by fair trade regulator CCI, which had found the bourse guilty of absuing its dominant market position in currency derivatives segment.

Reacting to the order, passed this morning after a nearly 3-year-long hearings on NSE’s appeal, the exchange said that it would appeal against the decision and “whatever it has done was in the interest of the development of the capital markets”.

In May 2011, the competition watchdog had found NSE guilty of abusing its dominant market position and adopting unfair trade practices in currency derivatives trading.

A month later, CCI also imposed a fine of Rs 55.5 crore on 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 against anti-competition practices.

Subsequently, NSE challenged CCI order before the Competition Appellate Tribunal (Compat), which granted a stay in September 2011. However, the Tribunal has now decided to uphold the CCI order.

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

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

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

Pronouncing NSE guilty of abusing its dominant market position in a 170-page order in June 2011, the CCI had also asked the country’s largest stock exchange to immediately stop subsidising its services.

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

MCX Stock Exchange (MCX-SX) had accused NSE of abusing its dominant market position to corner business in the CD segment.

CCI in its order had also directed the NSE to “cease and desist from unfair pricing, exclusionary conduct and unfairly using its dominant position in other markets to protect the relevant CD (currency derivative) market with immediate effect.”

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

The first order was passed with a majority vote of five 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, which found NSE guilty of abusing its market dominance and following unfair trade practices in the currency derivatives market.

(To receive our E-paper on whatsapp daily, please click here. We permit sharing of the paper's PDF on WhatsApp and other social media platforms.)

Free Press Journal