MCX-SX approaches CCI on feeless currency futures trade by NSE

The country’s newest stock exchange, MCX-SX, has approached the competition watchdog CCI complaining against fee-less currency futures transaction at rival National Stock Exchange, which in turn said this was a common practice for any new product.

Competition Commission of India (CCI) will decide in the next few days whether to take up the complaint by MCX-SX alleging predatory pricing by NSE, a CCI official said.

MCX-SX, promoted by commodity exchange MCX and Financial Technologies, in its complaint last month alleged that NSE was abusing its dominant position in the market place by allowing feeless transaction on the currency futures trading.

When contacted, an NSE spokesperson said: “NSE does not levy transaction charges in many of its products in the developmental stage. We have not received any communication from CCI so far. We shall certainly respond to it when we receive it.”

MCX-SX, which claims to have a market share of 52 per cent in the currency futures segment, in its complaint has said that NSE removing the levy on currency derivatives is unfair for a smaller player like them. “NSE is using their dominant position,” it said.

When contacted, an MCX-SX spokesperson said: “We have shared our concern at the requisite forum (CCI) and at this moment we do not wish to comment on this matter.”

A transaction fee is the principal source of revenue for stock exchanges and is collected as a percentage on the value of the securities traded.

MCX SX has filed a complaint under Section 3 of the Competition Act that deals with abuse of dominant position by a company in pricing of goods or services or creating a unfair market competition.

If the Commission finds NSE “prima facie” guilty of abusing its market position, it will admit MCX-SX’s complaint and then ask the Director General to investigate the matter.

MCX-SX, which started trading in currency derivatives in October 2008, contended that NSE can make up for the losses in reveune by subsidising it with the revenues from other segment of trades.