Govt bars e-Series contract trading on NSEL: Sources

Financial Technologies will remain in focus today. The government has decided to bar e-Series contract trading on NSEL. The bar applies to gold, silver, zinc, lead, nickel & platinum, reports CNBC-TV18’s Varinder Bansal quoting sources.

Meanwhile, the Forward Markets Commission (FMC) has asked National Spot Exchange Limited (NSEL) to settle dues to small investors on priority. The bigger takeaway is that all the major powers left with NSEL have been taken away and given to FMC. The government will now see how the settlement process will begin. The message coming from the government side is till the time NSEL pays dues off it cannot trade. The e-series turnover which was less than Rs 5 crore stood at Rs 200 crore a month ago. So, financially it may not be important because 99 percent of the trading has already been halted and the payout has been stopped. But the important message here is that the government is not allowing NSEL to do any trade till the time it pays entire money to the investors. The second important thing is that FMC will take the charge in terms of supervising the entire settlement process of NSEL. Yesterday, Jignesh Shah said that he is forming an independent committee. There are few other things which need to be watched going ahead; CNBC-TV18 learns that FMC will finally be the regulator for the spot commodity exchanges. It could be announced anytime in the next few weeks. It is learnt that the ministry has started working on the laws and regulations for the spot commodity exchanges. This is very important because until and unless there is clear cut guidelines in terms of the news rules and regulations there will be no fresh contracts on NSEL. This entire process could take five-six months or even more. So, are we clear in saying that NSEL cannot start trading anywhere in any contract for the next five-six months. This is an important question to answer. Everyone is looking for August 14 deadline where NSEL said that they will be declaring the entire payment schedule as per their understanding. Also, lots of questions have been raised about the settlement guarantee fund which has come from Rs 800 crore to Rs 65 crore. Jignesh Shah said that it was a margin settlement what has been done and that is why the reduction happened but the entire empowerment comes to FMC to call the shorts.