imposition of fine on nse by competition commission of india
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Imposition of fine on NSE by Competition Commission of India
Presented by: Neeraj Jain (2010130) Nikhil Beriwal (2010133) Section-C2DE
PRESENTATION OUTLINE
Introduction about NSE, CCI & MCX-SX Services provided by NSE About the penalty Features of the penalty The reaction of NSE towards the penalty
COMPETITION COMMISSION OF INDIA
It was established in 14 October 2003 It has been started to support the objectives of
Competition Act, 2002 It is an independent authority of Indian
Government and the Competition Watchdog Its main objective is to promote economic
efficiency through competition
NATIONAL STOCK EXCHANGE
It is the leading stock exchange of India Nifty is the calculator for NSE Nifty is derived by the performance of 50 large cap
companies that are within NSE NSE has a market capitalization of
around US$1.59 trillion NSE has over 1,552 listings as of December 2010
SERVICES PROVIDED BY NSE
Trading in Capital Market, Derivatives Market, and Currency Derivatives
NSE also offers trading in Retail govt. securities
MCX - SX
MCX Stock Exchange (MCX-SX), was launched on October 7, 2008
MCX-SX offers currency futures contracts in USDINR, EURINR, GBPINR and JPYINR.
Clearing and Settlement is conducted through the MCX-SX Clearing Corporation Ltd (MCX-SX CCL).
Daily turnover on July 1st was 18635 Cr.
REASONS FOR THE PENALTY
NSE was abusing its dominant market position
It adopted unfair trade practices and predatory pricing
NSE reduced trade related fees to discourage other entities.
Its clear intention was to eliminate competition from the market
A complaint was filed by NSE’s young rival MCX-SX
SIMILAR EVENTS IN THE PAST
In 2000, NSE waived transaction cost in equity derivatives segment
In gold ETF segment NSE reduced charges
Strike in 2009 by film producers who decided not to screen movie in multiplexes over payment matters
FEATURES OF THE PENALTY
Penalty involves a sum of 55.5 Cr fine
The penalty is equivalent to five per cent of the NSE's three-year average turnover
Order was given to terminate the subsidizing service immediately
The fine has to be paid within 30 days
REACTION OF NSE
NSE considered to decide its future course of action after studying the legal aspects
It can challenge the decision at Competition Appellate Tribunal or the Courts
It would act after obtaining the opinion of their legal advisors
FUTURE CIRCUMSTANCES NSE MIGHT FACE
MCX-SX is planning to file a case for claiming the compensation for the losses and damages
Its due to NSE's predatory pricing and other anti-competition moves
The sources have estimated that the claim could be near about Rs 450-500 Cr.
REFERENCES
http://www.nseindia.com/ http://www.thehindubusinessline.com/ http://competitionlawyer.blogspot.com/ http://www.thestatesman.net/ http://economictimes.indiatimes.com/ http://www.mcx-sx.com/ http://www.cci.gov.in/
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