CCI notice to NSE for unfair trade practices

The CCI has found that the NSE violated section 4 of the Competition Act,pertaining to abuse of dominant position, the sources said.

If the reply is found unsatisfactory,the CCI as per the act may impose a fine up to 10 per cent of the three year average profit. The case was filed by MCX-SX in November 2009 alleging that NSE had substantially reduced admission and trade-related fees in an attempt to eliminate competition and discourage other entities from entering the market.

The CCI had ordered an investigation into the allegations. The Director General Investigation had found the NSE guilty of abusing its dominant position in the currency derivatives trade segment. The DG report said the NSE used its dominant position and original monopoly in equity,F&O (Future and Options) and WDM (Wholesale Debt Market) markets to protect its position in the currency derivative (CD) market. Currency futures trading started on the NSE on August 29,2008,and at the MCX-SX on October 7,2008.

MCX-SX is promoted by commodity exchange MCX and Financial Technologies.

According to the data available on Sebi website,during the year ended March 31,2011,the total number of currency derivative contracts traded on the MCX-SX was worth over 90.31 crore,while that of NSE it was nearly 75 crore.

The total traded value of the currency derivative contract was about Rs 42 lakh crore on MCX-SX and Rs 34 lakh crore on NSE for 2010-11.