FT had approached the Competition Commission of India against the NSE - with respect to NSEs treatment of ODIN software, its handling of currency derivatives segment, and also with regards to its position on MCX-SX. On 2 of these 3 issues, CCI has come out very strongly against the NSE. All along, the market expectation was that FT would get favorable ruling on the 3rd point, but would find it difficult to argue the first 2 points.
Now it very much looks like FT will win 3 out of 3 against the NSE, proving to be a major embarassment to the NSE. Not just is it an embarassment, there is also scope for a penalty of upto 10% of NSE's average profits over the last 3 years.
I am not sure how the penalty plays out - if the penalty is on NSE, but just paid to the CCI, it will help FT a lot, but not directly impact earnings. If the penalty is paid to FT, being the aggreived party, then FT will get a massive boost in earnings.
Irrespective of what the penalty is, and who gets the penalty, this news is definitely major positive for FT, and major negative for the NSE. I doubt if NSE will continue its hardball tactics against FT in the light of this judgement by CCI.
Should see the decks cleared for MCX IPO - even though SEBI cleared this IPO, there was lot of hindrance from NSE - so FT initially took the extreme step of considering to list MCX only on BSE, and not on NSE. With this judgement from CCI, NSE will likely shut up and allow MCX to go ahead with IPO, and even allow listing on the NSE.
With this news, the clouds hanging over FT should clear significantly, and stock should outperform the market from here on.
Now it very much looks like FT will win 3 out of 3 against the NSE, proving to be a major embarassment to the NSE. Not just is it an embarassment, there is also scope for a penalty of upto 10% of NSE's average profits over the last 3 years.
I am not sure how the penalty plays out - if the penalty is on NSE, but just paid to the CCI, it will help FT a lot, but not directly impact earnings. If the penalty is paid to FT, being the aggreived party, then FT will get a massive boost in earnings.
Irrespective of what the penalty is, and who gets the penalty, this news is definitely major positive for FT, and major negative for the NSE. I doubt if NSE will continue its hardball tactics against FT in the light of this judgement by CCI.
Should see the decks cleared for MCX IPO - even though SEBI cleared this IPO, there was lot of hindrance from NSE - so FT initially took the extreme step of considering to list MCX only on BSE, and not on NSE. With this judgement from CCI, NSE will likely shut up and allow MCX to go ahead with IPO, and even allow listing on the NSE.
With this news, the clouds hanging over FT should clear significantly, and stock should outperform the market from here on.