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