In what would be its most significant ruling till date, the Competition Commission of India has said that the National Stock Exchange (NSE) abused its dominant position by resorting to predatory pricing.

According to sources, the commission has sent a show cause notice to NSE and has given one week for it to respond.

The decision was taken on Wednesday at a meeting of the commission. ?The CCI has issued a show cause notice to NSE as to why the commission should not take action against it. If the firm fails to respond, then the commission can slap a hefty fine,? an official source told FE, on condition of anonymity.

Under Section 27 of the Competition Act, the CCI can impose a fine of up to 10% of the company?s turnover.

The ruling follows a comprehensive probe conducted by the director-general of the commission after receiving a complaint from NSE?s rival MCX-SX.

FE had reported in November last year that the DG report had established beyond doubt that NSE enjoyed a dominant position in the exchange market by virtue of its presence across verticals, and it abused this privileged status by waiving transaction fee in the fledgling currency futures segment.

According to the Act, predatory pricing is an anti-competitive behaviour which is punishable.

At present, NSE deals with a trading volume of more than R2 lakh crore a day across various market segments. Close to 70% of the equity market transactions and 99% of trade in equity derivatives in the country take place on NSE platforms. On the other hand, MCX-SX, which started its trading business much after NSE and has a trading volume of around R15,000 crore a day is restricted to currency futures.

MCX-SX alleged that since NSE has deep pockets, it was misusing its status among the country?s stock exchanges to indulge in predatory pricing in the new area of currency derivatives.

The commission on Wednesday also imposed a penalty of R1 lakh each on 27 film producers on charges of colluding through a cartel to exploit theatre owners. The CCI imposed the fine on filmmakers after finding them guilty of entering into an anti-competitive agreement.

In another complaint of over-charging by airlines, CCI decided to once again hold discussions with the Director General of Civil Aviation to understand the pricing situation during the Air India strike.