Bombay High Court today said it would pass order on October 7 on whether the settlement of e—series bullion contracts at the troubled National Spot Exchange Ltd (NSEL) should be aggregated with that of the paired contracts being overseen by the Forward Markets Commission.

Hearing a petition filed by an investor, seeking a stay on the settlement, a bench headed by Justice S F Vajifdar asked FMC to adopt safeguards for the settlement process of bullion deals on NSEL to protect the investors.

The bench suggested that the Commodity Regulator FMC and Economic Offences Wing of Mumbai police should depute their officers to NSEL for inspection of e—series contracts.

Another safeguard suggested by the court was that every request for financial settlement should be forwarded to FMC.

The bench said it would pass an order on October 7 on whether the settlement of e—series contracts should be aggregated with that of the so—called paired contracts.

Paired contracts are those where borrowers sell commodities on the exchange to investors while simultaneously agreeing to buy them back after stipulated period.

The court also made it clear that it was expected of the FMC to investigate complaints, as a regulator should do.

The petition seeks clubbing settlement of bullion deals with paired contracts, because settlement of gold and silver contracts would give preferential treatment to one set of investors.

The judges had asked FMC to make its stand clear on what role it had to play, on petitioner Ketan Shah’s argument that e—series contracts should be clubbed with paired contracts.

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