No relief for NSE in market monopoly suit

The Competition Appellate Tribunal (COMPAT) on Friday declined to grant the National Stock Exchange (NSE) interim relief in a market monopoly case. The Competition Commission of India (CCI) had directed NSE to maintain separate segment-wise financial records for equities, currency derivatives and other segments.

This comes on the heels of another stock exchange, MCX-SX, approaching CCI against NSE alleging monopolistic practices, where the latter was found gulity of such practices. NSE had pleaded to COMPAT against this order but the appeal was rejected.

Rejecting NSE’s appeal, COMPAT observed the CCI order was in accordance with the competition laws in India. NSE had contended on March 15 that maintaining separate segment-wise accounts would entail costs and would be time-consuming. NSE has also stated this was not required under accounting standard AS (17). COMPAT observed that NSE had made the fresh appeal against CCI’s order to maintain separate accounts “at the last juncture”, though they had ample opportunity to contest the order in competent bodies.

“Thus, if NSE is granted any interim relief now to maintain separate accounts, then the direction would automatically be pushed to the next financial year, that is, from April 2013,” COMPAT said. NSE will have to start separate segment-wise reporting from April 1. Although, COMPAT said it was not the competent body to decide on regulatory issues like compliance of accounting standards, its order could certainly hold NSE accountable for averments under AS (17), as well as the undertakings made by NSE with CCI to comply with the directions of CCI within the stipulated deadline.