'NSEL to start trading after new regulations by FMC'

The troubled National Spot Exchange Limited (NSEL) today said it is committed to ensure proper settlement of all outstanding obligations but will resume operations only after the commodity regulator FMC issues guidelines for the spot exchanges.

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"The Exchange is fully committed to ensure proper settlement of all outstanding obligations and to comply with the directions issued by the government in this regard and to settle all issues as per rules and bylaws of the Exchange. We will commence trading operations once new regulations by FMC are in place," NSEL MD and CEO Anjani Sinha told PTI here.

The exchange officials and market participants held the meeting with Forward Markets Commission (FMC) officials today to resolve the issue of settlement, Sinha said.

NSEL had earlier suspended trading and merged the settlement cycles of all one-day forward contracts (other than e-series contracts) on July 31.

The said action was taken due to certain abrupt structural changes in the market place leading to disruption.

This situation was aggravated by the loss of trading interest, due to uncertainties leading to trade in-equilibrium.

Sinha pointed out that in the interest of arriving at a consensus and satisfactory solution for settlement of dues in accordance with Exchange rules and bylaws, he held various meetings with the members of the exchange, the buyers/ processors and FMC officials.

These meetings were also aimed at ensuring avoidance of any incidence, which may have consequential impact on larger market.

He expressed confidence over handling large quantum of pay-in/pay-out obligations at the same time. However, in case of declaration of default by any member, which would lead to a long litigation process, two options have been proposed and the final decision would be taken after due consultation with all stakeholders.