According to a report published in the Economic Times, Monday, 29 Nov., 2010, the Director-General, CCI (DG), the investigating wing of CCI, has found National Stock Exchange (NSE) abusing its dominant position in the currency derivative segement of exchange market. The report suggests that DG has prepared a 245-page dossier detailing how NSE has over several years abused its dominant position and financial muscle to kill competition in the countrys stock exchange space.It seems from the reports that DG has found that NSE violated Section 4(2)( a)( ii),and Section 4(2)( e) read with 4(1) of the Competition Act,2002.
CCI had ordered a probe into the practices of NSE after it received information from MCX Stock Exchange (MCX-SX) alleging that NSE was indulging in abusive practices by waiving the transaction fee on currency derivatives.
The case is interesting in many aspects. First, CCI spread its wings into competition in capital markets within a year of Section 3 and 4 getting enforced; showing the overarching jurisdiction of CCI. Second, it seems that DG has recommended several remedial measures which could lead to the division of NSE into more than one entity so that there is competition in the country's stock exchange business.
As and when more information comes in public domain, this blog would closely follow all issues surrounding this case.
Readers may also access a report published in Financial Express here
Disclaimer: This piece on this blog is based on information published in media. The actual facts may be different.
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