Metropolitan Stock Exchange of India (MSEI) is soon set to submit an independent report in support of its claim seeking Rs 856 crore as compensation from National Stock Exchange (NSE) at the Competition Appellate Tribunal (Compat).
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The nine-year old tussle relates to MSEI’s complaint against the NSE alleging abuse of its dominant position and predatory pricing in the currency derivatives segment.
MSEI, earlier known as MCX Stock Exchange (MCX-SX), is required by law to file an independent report by a chartered accountant validating the claims and the calculations based on which it had sought compensation. Incidentally, MSEI filed its compensation application in February 2015.
The dispute dates back to October 2008 when MCX-SX started offering trading in currency futures. Its larger counterpart, NSE, was already offering currency futures trading and was not levying any charges in the segment. This forced MCX-SX to offer currency futures trading for free.
CCI complaint
In 2009, MSEI filed a complaint against NSE at the Competition Commission of India (CCI) alleging that the zero-pricing strategy was an abuse of market dominance. NSE, it claimed, was cross-subsidising losses in the currency segment from profits in other segments like equity and equity derivatives.
In June 2011, CCI ruled in favour of MSEI and levied a penalty of Rs 55.5 crore on the NSE which challenged the ruling at Compat and then at the Supreme Court, which granted an interim stay on the penalty. Meanwhile, NSE started levying charges in the currency segment from August 2011.
Source: The Hindu