FMC allays investor fears as NSEL debacle hammers FTIL stock
02 August 2013
Commodity market regulator Forward Markets Commission (FMC) today said the government will do everything possible to protect investors and that it was too early to reach a conclusion on the potential default risk due to suspension of some trading contracts on the National Spot Exchange Ltd (NSEL).
Shares in Financial Technologies (India) Ltd (FTEL) closed 23 per cent lower today after NSEL, earlier this week, abruptly suspended trading in most of its forward contracts and deferred payments on client trades.
"At this point I don't think we should have any such apprehension," FMC chairman Ramesh Abhishek said, adding, "The NSEL is very confident that they will be able to honour their obligations for all the open contracts."
He also said the government will take all possible measures to protect the interests of investors.
He said the FMC was awaiting information from NSEL on the rationale behind deferring the settlement of contracts.
He said NSEL was expected to submit the information by the end of the day and the FMC will analyse and send the report to the consumer affairs ministry for appropriate action very soon.
The FMC chief said NSEL had reported stocks worth Rs6,200 crore and commitments of Rs5,400 crore and there need not be any concern about possible defaults.
The NSEL on 31 July announced suspension of trading in most contracts and deferred settlement of contracts for 15 days, raising fears about potential payout defaults by the exchange to brokers and clients.
Besides FMC, capital market regulator SEBI has started a separate probe into the crash of shares of two listed group companies - Financial Technologies India Ltd (FTIL) and MCX - following the NSEL decision.