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CCI fines NSE 5% of turnover for abusing dominance

The Competition Commission of India (CCI) has reportedly fixed the penalty to be imposed on the National Stock Exchange (NSE) a month after having found the bourse guilty of abuse of dominant position in a dispute with MCX-SX.

It is understood that the NSE has been asked to pay five per cent of its average annual turnover as penalty apart from being directed to ‘cease and desist’ from unfair trade practices in the currency derivatives (CD) sector, reported Moneycontrol.

Further, the NSE has to stop subsidising its currency derivatives operations and refrain from pursuing any anti-competitive practices, according to Moneycontrol.

The CCI had in a majority order dated 25 May 2011 held that the NSE had contravened certain provisions of section 4 of the Competition Act and enjoyed a dominant position in the CD segment contrary to the Director General’s (DG’s) finding that NSE was dominant in the entire stock exchange, reported Legally India.

Amarchand Mangaldas with Vaish Associates and P&A Law Offices had represented the NSE and MCX-SX respectively before the CCI.

MCX-SX had approached the CCI against NSE in November 2009, afterwards a DG probe was ordered and its report was submitted in September 2010. A show cause notice was then served on NSE by the CCI in April 2011 pursuant to which an order was passed in May 2011.

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