Government bans e-series contracts on NSEL
06 Aug 2013
The government has banned trading in e-series contracts on the National Spot Exchange Ltd (NSEL) ahead of the exchange settling about Rs5,600 crore dues to investors, food and consumer affairs minister K V Thomas said today.
NSEL suspended trading in e-series contracts like gold, silver and some other base metals, ahead of the government notification banning the contract.
E-series contracts functions like the cash segment in equities, but offers commodities in the demat form in smaller denominations.
"We have stopped trading in e-series contracts on NSEL. A notification will be issued in a day or two," PTI quoted Thomas as saying.
"We decided to stop trade in e-series as we want to see first NSEL settles the dues," he added.
The ban was placed after the market hours.
The crisis had led to a complete halt of operation on NSEL platform, after the exchange, on 31 July, suspended trading in all contracts other than e-series contracts.
NSEL offers e-series contracts in gold, silver, copper, zinc, lead, nickel and platinum. Under e-series contracts, retail investors can buy and sell commodities in demat form.
E-series contributed about 40 per cent of the NSEL's Rs18,315 crore turnover in June.
The e-series contracts functions like the cash segment in equities, but offers commodities in the demat form in smaller denominations.
The NSEL crisis hit both its promoter Financial Technologies India Ltd and sister entity Multi Commodity Exchange of India (MCX).
Meanwhile, in a filing with the Bombay Stock Exchange, Shreekant Javalgekar, managing director and CEO, clarified that MCX is a well regulated entity with a strong debt-free balance sheet and a net worth in excess of Rs1,200 crore as of 30 June.
For the quarter ended June, MCX reported a net profit of Rs60.12 crore. For the year ended March 2013, MCX reported net profit of 298.64 crore.
