As a penalty, NSE has been asked to pay 5% of its three-year average annual turnover and also ‘cease and desist’ of unfair trade practices in the currency derivative trading
New Delhi: In the long-running tussle between the National Stock Exchange (NSE) and its younger rival MCX-SX, the Competition Commission of India (CCI) is believed to have penalised NSE for abusing its dominant market position, reports PTI.
As a penalty, NSE has been asked to pay 5% of its three-year average annual turnover and also ‘cease and desist’ of unfair trade practices in the currency derivative trading, sources said.
According to the order, NSE has to stop subsidising its currency derivatives operations and refrain from pursuing any anti-competitive practices.
While sources said that CCI passed the order on Thursday, an NSE official said they have not got any order as yet.
Along with the majority the CCI order on 25th May, the commission had issued a notice to the bourse before quantifying the penalty.
Last month’s order was passed with a majority vote of five members of the seven-member commission.
Two members—Anurag Goel and Geeta Gouri—had dissented with the majority order, where NSE was found guilty of abusing its market dominance and following unfair trade practices in the currency derivatives market.
However, CCI had already made its stand clear that the dissent note of the two members, which has been issued as per a court direction pursuant to a petition filed by NSE, would not affect its ruling, as a majority order is considered enforceable under the regulations.
NSE entered currency derivatives in August 2008, followed by MCX-SX in October 2008 and later by USE in September 2010.
The CCI order came after a year-long probe by CCI, which began after MCX-SX filed a complaint on 16 November 2009. The CCI sought a detailed probe into the matter by its director general (DG), which submitted its report in September 2010.
After the DG’s report found NSE to be guilty of anti-competition practices, the CCI conducted its further inquiry with various parties and issued a show-cause notice to NSE on April 29 this year and later its majority order on 25th May.
The matter had also reached Delhi High Court after the NSE approached the court with a plea that it could reply to the notice only after reviewing the complete order.
The court, on 31st May, asked CCI to provide NSE by 3rd June its complete order, including views of members dissenting with the majority ruling.
NSE has an option to challenge CCI’s order at the Competition Appellate Tribunal.
As per the court direction, NSE would now have to reply by 10th June to the CCI’s penalty notice, after which the competition watchdog will decide on the penal actions to be taken against the bourse.
During the court hearing on NSE’s petition, the MCX-SX counsel had alleged that attempts are being made to complicate the matter as the current CCI chairman was retiring on the coming 3rd June.
Incidentally, the name of Anurag Goel was doing the rounds as one of the candidates to succeed Dhanendra Kumar as CCI chairman.
“They are complicating the situation by delaying.
Chairman is retiring and then they will plead ‘forum non-judice’ (re-decide the issue from beginning)” MCX-SX counsel had said on NSE’s petition seeking dissent notes before replying to the CCI notice.
“The companies have kept their issues open for more than three years or two years, as the case may be, in contravention of the prescribed time limit of ten working days under the regulations,” the SEBI order said
Mumbai: Market regulator Securities and Exchange Board of India (SEBI) on Thursday asked two Sahara group entities to return money collected from millions of investors through an instrument named Optionally Fully Convertible Debentures (OFCD), citing violation of regulatory norms, reports PTI.
As per a SEBI order, Sahara Commodity Services Corporation (earlier known as Sahara India Real Estate Corporation) and Sahara Housing Investment Corporation (SHICL) will be required to refund the money raised from hybrid instrument OFCD to investors along with 15% interest.
The two companies and its promoter Subrata Roy Sahara, and the directors—Vandana Bhargava, Ravi Shankar Dubey and Ashok Roy Choudhary—jointly and severally, shall refund the money collected, the order said.
Besides, the regulator has also restrained the entities from accessing the securities market for raising funds, till the time payments are made to the satisfaction of the SEBI.
Although the total amount raised by the two companies is not known, Sahara Commodity has been raising money since 2008, while SHICL began fund collection in 2009. The companies have been collecting money through different schemes from investors which has been estimated at several millions.
“The companies have kept their issues open for more than three years or two years, as the case may be, in contravention of the prescribed time limit of ten working days under the regulations,” it said.
The two companies have failed to apply for and obtain listing permission from recognised stock exchanges, it said.
While Planning Commission deputy chairman and EGoM member Montek Singh Ahluwalia is believed to have pushed for additional exports of up to 10 lakh tonnes, food minister KV Thomas insisted that exports of only five lakh tonnes may be permitted keeping in view of high demand in the coming festive season and high retail prices
New Delhi: Amid estimates of sugar output exceeding demand this year, the government on Thursday allowed exports of additional 5 lakh tonnes of sugar under the Open General Licence (OGL), reports PTI.
“The Empowered Group of Ministers (EGoM) has approved additional export of 5 lakh tonnes of sugar,” food minister KV Thomas told PTI after a meeting of the EGoM on food here.
Some members of the EGoM, including Planning Commission deputy chairman Montek Singh Ahluwalia, are s believed to have pushed for additional exports of up to 10 lakh tonnes.
According to sources, Mr Thomas insisted that exports of only five lakh tonnes may be permitted keeping in view of high demand in the coming festive season and high retail prices.
They added that the food minister noted that interests of both farmers and consumers need to be protected as well.
Besides Mr Ahluwalia and Mr Thomas, home minister P Chidambaram and rural development minister Vilasrao Deshmukh were among those who were present in the meeting of the EGoM, which is headed by finance minister Pranab Mukherjee.
Agriculture minister Sharad Pawar was not present as he is away in Paris to attend the Group of Twenty (G-20) meeting.
The sugar sector is fully controlled by the government which allows exports under OGL from time to time after taking into account the supply-demand situation.
According to government estimates, sugar output in India, the world’s second largest producer and biggest consumer, is projected at 24.2 million tonnes (mt) in the 2010-11 (October- September).The annual domestic demand stands at 22-22.5 mt.
In view of projected output, the industry has been pressing for additional sugar exports of 15 lakh tonnes.
At present, retail sugar prices are ruling in the range of Rs30-Rs32 per kg and in some parts are still ruling at Rs40 a kg.
Last week, MR Pawar had written to prime minister Manmohan Singh urging him to allow further export of sugar as India only had a month to cash in on high global prices of the sweetener.
There is a case for more export of sugar, as domestic production is high and global prices are ruling firm at a premium of Rs500-Rs600 per quintal vis-à-vis domestic sugar prices, he had said.
Mr Pawar had reasoned that additional export of sugar will reduce the burden on sugar mills of the high stocks and improve their cash flows to tide over the ensuring financial crisis and payment to farmers.
The food minister informed the EGoM that it would take an informed decision on removing stock holding limit on sugar in September as retail prices are not declining in the pace of ex-mill prices, sources added.
In April, the government had allowed 5,00,000 tonnes of sugar exports under OGL, which enables shipment without any restrictions.
In view of higher sugar output, the industry had been pressing for additional sugar export of 15 lakh tonnes.