MSEI may seek Rs 800-cr compensation from NSE

The Metropolitan Stock Exchange (earlier MCX-SX) plans to seek compensation of over Rs 800 crore from the National Stock Exchange (NSE) on account of losses it made due to zero-pricing strategy adopted by the former in the currency derivatives segment.

The tussle between the two exchanges started in October 2008 when MSEI (then MCX-SX) launched its currency derivatives segment. NSE, which was a pioneer in the segment, had offered the facility for free of cost and MSEI had to follow with the same scheme.

MSEI had sought intervention of the Competition Commission of India (CCI) where the competition watchdog noted there was a clear intention on the part of NSE to eliminate competition. Later, NSE had challenged the CCI order, which was upheld by the Competition Appellate Tribunal (Compat).

As directed by the tribunal, MSEI has appointed a team of independent industry experts to justify the claim of compensation sought. According to sources, the assessment of the compensation is estimated at over Rs 800 crore.

"The exchange has engaged three independent industry experts to give views to Compat. The exchange has also taken the services of FTI Consulting, a global business advisory firm in the matter," said a person with direct know in the matter.

MSEI was also asked to submit its revised compensation claim to the tribunal by July. The next hearing in the matter is scheduled for August.In an e-mail response, an NSE spokesperson said the exchange would not be able to comment, since the matter was sub-judice.