NSE to levy fees on currency derivatives

Leading stock exchange NSE on Friday said it has decided to levycharges for currency derivatives trading - a move that follows a CompetitionCommission order holding it guilty of abusing its dominant position with this"predatory" pricing.

The charge would be levied by the exchange with effect fromAugust 22.

However, the exchange would still challenge the order ofCompetition Commission of India, which on June 23, 2010 imposed a Rs 55.5 crorefine on the country's largest bourse for abusing its dominant market positionand asked it to stop the "predatory" pricing practices.

In its order passed pursuant to an inquiry after a complaintfiled by rival exchange MCX-SX, CCI said NSE's move towards subsidising itsservices was at the cost of rivals.

NSE said it had earlier waived the charges for the benefitof the market and the consumers, and all market players - including exchanges,members and consumers have benefited from the move.

While NSE would be challenging the CCI order, it decided tolevy the charge out of respect for the Commission. The CCI had felt that NSEshould levy a charge and we are abiding by that suggestion, an NSE officialsaid, but asserted that the exchange would still challenge the CCI order.

The National Stock Exchange (NSE) commenced trading incurrency derivatives on August 29, 2009, becoming the first Indian bourse tooffer this product for investors. However, it has not been levying any chargefor this product till now.

However, the exchange has now decided to levy a charge forcurrency derivatives with effect from August 22.

Trading in currency futures segment has seen a rapid growthever since its launch and the daily average trading volume has crossed Rs18,000 crore, from a turnover of Rs 291 crore in the first day of trading onAugust 29, 2009.