Competition Commission of India: A complaint was filed by the Informant under Section 19(1)(a) of the Competition Act, 2002 (‘Act’), alleging violations of Sections 3 and 4 of the Act by ICICI Securities Limited (‘ICICI’), in alleged collusion with the National Stock Exchange (‘NSE’) and the Bombay Stock Exchange (‘BSE’). The four-member Bench comprising Ravneet Kaur (Chairperson), Anil Agrawal (Member), Sweta Kakkad (Member), and Deepak Anurag (Member) examined whether the standardisation of the Authorised Person (‘AP’) Agreement and ICICI’s termination practices contravened Sections 3(3), 3(4), and 4 of the Act.
The Competition Commission of India (‘CCI’) observed that the agreement format stemmed from Securities and Exchange Board of India (‘SEBI’) regulatory framework aimed at investor protection and operational consistency. Therefore, it held that the enforcement of uniform AP Agreements by NSE and BSE did not constitute a concerted practice under Section 3(3) of the Act. The CCI noted that the securities broking industry in India was competitive and include several large players, and that ICICI did not hold a dominant position. The CCI found no evidence of ICICI exercising significant market power or engaging in anti-competitive vertical restraints. The CCI thus held that there was no prima facie case of contravention of Sections 3(4) and 4 of the Act.
Background
The Informant had been an AP of ICICI since 20-3-2019 and had been registered with both NSE and BSE under a standard AP Agreement format that had been mandated by SEBI and enforced by the stock exchanges. This agreement format had been made mandatory by NSE through Circular No. 705 dated 3-12-2009, based on SEBI’s Circular No. MIRSD/DR-1/Cir-16/09 dated 6-11-2009. BSE had followed a similar system.
In May 2025, ICICI had sent a termination notice to the Informant under the “termination without cause” clause, following a previous wave of mass terminations in November 2024 that had affected around 600 APs, effective February 2025. The Informant claimed that ICICI’s unilateral terminations had deprived APs of the clients they had brought in through personal effort and investment, while ICICI had continued to retain and serve those clients. The Informant alleged that the AP Agreements had been one-sided and non-negotiable, creating a structure in which brokers had exercised unfair control, leaving APs with no rights, compensation, or access to their own clients after termination.
The Informant had alleged that NSE and BSE had helped create an anti-competitive structure by mandating identical AP Agreements, leaving APs with no bargaining power. The termination clause had allowed brokers to terminate APs without cause, notice, or compensation, thereby harming their livelihood and independence. The regulatory structure had forced APs to be economically dependent on brokers, as they could register with only one broker per exchange, and clients had remained with the broker after termination. As a result, APs had lost income, investments, goodwill, and business reputation. The Informant had claimed that this had affected hundreds of APs and had submitted support letters from five others who had faced similar losses. The Informant had further stated that SEBI and the stock exchanges lacked authority over issues such as abuse of dominance and denial of market access, which fell under the jurisdiction of the CCI.
The Informant had alleged violations of Section 3(3) of the Act due to a concerted practice between NSE and BSE to enforce identical, non-negotiable AP Agreements, which had eliminated competition in contract terms and strengthened broker control. Under Section 3(4) of the Act, ICICI’s actions had amounted to vertical restraints through refusal to deal, tie-in arrangements, and exclusive distribution. The Informant had also alleged abuse of dominance under Section 4 of the Act by imposing unfair contract terms under Section 4(2)(a)(i) of the Act, engaging in unjust enrichment under Section 4(2)(a)(ii) of the Act, and denying market access through mass terminations under Section 4(2)(c) of the Act. The Informant had requested the CCI to protect consumer interest, order an investigation under Section 26(1) of the Act, stop the terminations, impose penalties under Section 27 of the Act, and recommend reforms to SEBI, NSE, and BSE. The Informant had also filed an application on 15-7-2025 seeking a stay on terminations effective 31-7-2025, and another on 23-7-2025 requesting an urgent hearing.
Analysis, Law, and Decision
The CCI examined allegations against ICICI, NSE, and BSE of anti-competitive conduct in the securities broking market. The main charge was that NSE and BSE engaged in a concerted practice by mandating a standard, non-negotiable AP Agreement, allegedly limiting competition. However, the CCI noted that the agreement’s format, including the termination clause, was based on a SEBI-mandated framework i.e. Circular No. MIRSD/DR-1/Cir-16/09 dated 6-11-2009, implemented by NSE through Circular No. NSE/CMTR/705 dated 3-12-2009. This framework aimed at investor protection, regulatory uniformity, and operational consistency. Hence, the CCI opined that the alleged concerted practice by NSE and BSE of prescribing a standard agreement was derived from the regulatory architecture and does not fall under the scope of Section 3(3) of the Act.
In relation to ICICI, the allegations involved potential contraventions of Section 3(4) and Section 4 of the Act. The CCI noted concerns such as refusal to deal, where APs could not continue servicing clients after termination; tie-in arrangements, which require dual registration with the same broker on both NSE and BSE; and exclusive distribution obligations, under which APs were allowed to work with only one broker per exchange. However, the CCI observed that these concerns arise from the regulatory and contractual structure between trading members and APs. Since there was a principal-agent relationship, the CCI did not consider the standardised AP agreements to be anti-competitive. Moreover, the CCI noted that for conduct to be examined under Section 3(4) of the Act, the party concerned must possess significant market power. Based on publicly available information, the CCI pointed out that in the market for securities intermediation space in India included, many established players such as HDFC Securities, Kotak Securities, and SBI Securities. Therefore, the CCI found no merit in the allegation that ICICI violated Section 3(4) of the Act.
With respect to Section 4 of the Act, which concern abuse of dominance, the CCI assessed whether ICICI held a dominant position in the relevant market. It highlighted the fragmented and competitive nature of the securities intermediation industry in India and stated that there were several key players who acted as a competitive constraint on ICICI. Thus, the CCI concluded that there was no need to precisely define the relevant market. Still, even if the market were defined narrowly as “market for securities broking services rendered through APs in India,” ICICI did not appear to be dominant. Since establishing dominance was a prerequisite for any claim under Section 4 of the Act, the CCI concluded that there was no merit in the allegation. Accordingly, the CCI held that there was no prima facie case of contravention of Sections 3 and 4 of the Act by ICICI, NSE, and BSE. The CCI ordered the case to be closed under Section 26(2) of the Act, and both applications were declared infructuous.
[Krishna Kumar Agrawal v. ICICI Securities Ltd., 2025 SCC OnLine CCI 84, decided on 15-9-2025]