NSE asks Delhi HC to direct CCI for detailed, reasoned order

Challenging a penalty notice from the Competition Commission of India (CCI), National Stock Exchange (NSE) today approached the Delhi High Court with a petition that the competition watchdog be directed to provide full details and reasons behind its move.

The NSE also sought more time to reply to the show-cause notice of CCI, asking why a penalty should not be imposed on it for alleged abuse of its dominant position in the stock exchange arena.

The NSE has contended that the notice did not give reasons as to how did CCI reach the conclusion of slapping the penalty.

When contacted, an NSE spokesperson said: "We are unable to comment on any matter which is ongoing and subjudice."

The CCI notice followed its internal investigations after complaints filed by NSE's rival in currency derivative market, MCX-SX. It alleged that NSE substantially reduced admission and trade related fees to eliminate competition and discourage other entities from entering the market.

The probe found that NSE allegedly violated Section 4 of the Competition Act, which relates to abuse of dominant market position.

CCI asked NSE as to why a penalty should not be imposed on it for unfair trade practices in connection with currency derivatives trading. It sent the notice to NSE before deciding on the quantum of the fine to be slapped on it.

In December, CCI's investigation wing recommended action against NSE saying that it used its dominant position and original monopoly in equity, F&O (Future and Options) and WDM (Wholesale Debt Market) markets to protect its position in the currency derivative (CD) market.

Currency futures trading started on the NSE on August 29, 2008, and at the MCX-SX on October 7, 2008.

While MCX-SX is allowed to trade only in currency derivatives, NSE has presence in all major financial trading segment.