NCLAT to hear MSE’s Rs. 856 crore claim on October 10th 2017
by Shrutee K/DNS
Mumbai,
September 26, 2017: National Company Law Appellate
Tribunal (NCLAT) will take up hearing of compensation claim of Metropolitan
Stock Exchange of India Limited (“MSE”/”Exchange”)
against National Stock Exchange of India Limited (“NSE”) relating to the predatory pricing policy adopted by NSE and
the misuse of its dominant position in the industry, on October 10th
2017.
In 2008, both MSE and NSE launched currency
future contracts in Indian markets almost simultaneously. NSE priced the
transaction charges on these contracts at zero and given NSE’s dominant
position, MSE was left with no choice but to adopt zero pricing as well. This
made a significant and material dent on the financial position of the new Exchange.
MSE filed a complaint with the Competition Commission of India (“CCI”) alleging predatory pricing
(waiver of transaction fees, data-feed fees and admission fees etc. by NSE) wherein
CCI found NSE guilty and imposed a fine of Rs. 55.5 crore. NSE filed an appeal
to Competition Appellate Tribunal (“COMPAT”)
which too found NSE guilty. NSE then moved the Supreme Court for relief and its
appeal is still pending.
As per the process, the Exchange has filed an
application for award of compensation against NSE for Rs. 856 crore before the
COMPAT, pending the appeal. Now, as COMPAT has ceased to exist effective 26
May, 2017, all pending matters before the COMPAT stand transferred to the
NCLAT.
Commenting on the upcoming hearing, Mr. Udai Kumar, MD & CEO of MSE said,
“MSE started as a fast growing Exchange with immense potential when it was
deeply impacted by the financial burden imposed by NSE’s predatory pricing. Speedier
disposal of this matter is the need of the hour. It will encourage transparency
and compliance with existing completion laws and practices across the spectrum
and also dis-incentivize anti-competitive practises and misuse of dominant
position.”
MSE, the
youngest and the third national level stock exchange, is focused on enhancing
fixed income and currency segments as part of its turnaround strategy. It’s
currently in talks with MFs and AMCs to encourage participation without
ignoring the equity segment. It recently launched
a “Member Activation Drive” that will provide all infrastructural support to
its members, various incentive schemes as well as lowest transaction
charges on almost all product contracts. The Exchange has
also introduced a Business Loyalty Program, called MY MSE, under which the
members need to comply with several businesses and risk mitigating parameters
to be eligible for the incentive. Among the incentive schemes,
the Exchange is reimbursing Clearing Fee paid by its Trading Members to their
Clearing Members, reducing the transactional cost of Brokers. The Exchange
is also showcasing the usefulness of executing large equity trades on its
platform.
About
MSE: Metropolitan Stock Exchange of India Limited (“MSE”/”Exchange”) is a SEBI-recognized
stock exchange with licences to operate in currency, interest rate & equity
derivatives, equity cash, ETFs and debt. Its shareholders include India’s top
public and private sector banks and domestic financial institutions who
together hold over 34%, besides eminent shareholders like Rakesh Jhunjhunwala,
Radhakishan Damani and Nemish S. Shah. MSE boasts of a Governing Board with
eminent personalities and a professional management to steer the Exchange to
its growth potential. In line with global best practices and regulatory
requirements, clearing & settlement of trade on the Exchange
are carried through its subsidiary, Metropolitan Clearing Corporation of India Limited
(“MCCIL”), an accredited Central
Counterparty.
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