Currency derivatives: NSE plea rejected

The COMPAT has turned down NSE's plea seeking a stay on the fair trade regulator CCI's direction to maintain separate accounts for its currency derivatives and other business segments.

Written by Agencies | New Delhi | Published: March 30, 2012 7:18 pm

The Competition Appellate Tribunal has turned down National Stock Exchange’s plea seeking a stay on the fair trade regulator CCI’s direction to maintain separate accounts for its currency derivatives and other business segments.

NSE had requested the tribunal to stay a Competition Commission of India (CCI) directive to maintain separate accounts for its each segment with effect from April 1,2012.

The direction was part of a CCI order passed in June 2011,where NSE was also asked to pay a penalty of Rs 55.5 crore among other directions.

However,NSE had approached COMPAT against the order,following which the tribunal in September 2011 provided an interim stay on the penalty.

CCI had found NSE guilty of “abusing” its dominant market position,after its enquiry into complaints filed by rival MCX-SX. It had also asked the NSE to levy a transaction charge on currency derivatives trading and segregate its accounts for various business segments,among others.

Granting an interim stay on the penalty on September 8 last year,COMPAT had asked the NSE to file an undertaking before CCI that it would comply with its direction to maintain separate accounts.

On March 15,2012,NSE filed an application before the COMPAT,seeking stay on the direction about maintenance of separate accounts for each segment.

Contending that it was time-consuming and costly affair,NSE submitted that once having embarked on segmental accounts,this process cannot be reversed and the costs and efforts expended cannot be recovered even if the final order comes in its favour.

Rejecting NSE’s plea,the COMPAT said that there was “ample opportunity to the appellant (NSE) to contest the direction of maintenance of separate accounts for all the segments for all the products and services offered by the appellant/applicant before the competent body.”

COMPAT said that NSE has sought the stay at the last juncture and “in these facts and circumstances,we find no merit in granting any interim relief in this application.”

“If any interim relief is accorded now,it would also imply that the direction of maintenance of separate segmental accounts would automatically slip to April 1,2013 the next financial year,” it added.

“In any event,we have already made it clear that the final decision in this matter of maintenance of separate accounts in terms of Accounting Standard (AS) 17 can only be made by the competent body which regulates such matters,” said the two-member COMPAT bench consisting Rahul Sarin and Pravin Tripathi.

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