COMPETITION ACT 2002

This Act replaced Monopolies & Restrictive Trade Practices Act of 1969

Prof Rashmi Narayanswamy

Objectives of the Act

To prevent practices having adverse effect on Competition. To promote and sustain competition in market. To protect the interests of consumers. To ensure freedom of trade carried on by other participants in markets in India.
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Restrictive Business practices covered by Competition Law

Horizontal Restraints Price fixing or price rigging. Restraint of output Allocation of customers among suppliers Prevention of other suppliers to compete in the market. Bid-rigging (bidders collude and keep the bid)
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Restrictive Business practices covered by Competition Law

Vertical Restraints Exclusive dealing between producers and distributors. Producer suppliers only to sole-selling distributors . Supplier charges to different parties at different prices. Suppliers sell at low price to drive away competitors.
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Government policies as a deterrent to Competition.

Swminathan S. Aiyar has observed that some restrictive policies of govt. like reservation of certain specific group like Small scale industries are actually deterrent to fair competition.

Prof Rashmi Narayanswamy

Pre-requisites for a Competitive policy

Requirement for economic reforms of liberalization, deregulation and privatization. Abolishment of all physical and fiscal controls on movement of goods within the country. Divesture of government holdings in state monopolies and public enterprises. Prof Rashmi Narayanswamy

Competition Policy include:

Horizontal and Vertical agreement among Enterprises. Abuse of Dominance leading to restriction of quantities and market restrictions. Mergers & Acquisitions (e.g. Acquisition of Corus by TATA Steel).
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Securitization Transaction
Securitization is a structured finance process, which involves pooling and repackaging of cash-flow producing financial assets into securities that are then sold to investors.

Prof Rashmi Narayanswamy

Asset Securitization transaction

Transactions for related financial purposes wherein a person directly or indirectly sells, assigns, transfers, leases or otherwise disposes of financial assets to a person who has acquired an undivided co-ownership interest or creating interests in securities.
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Asset based Security

Type of debt security that is based on a pool of assets or collateralized by the cash flows from a specified pool of underlying assets.

Prof Rashmi Narayanswamy

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Asset Securitization transaction

Prof Rashmi Narayanswamy

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