The Government has granted more powers to the Forward Markets Commission (FMC) to resolve the National Spot Exchange Ltd (NSEL) imbroglio.
The Ministry of Consumer Affairs has issued a notification empowering FMC to ensure that NSEL settles the Rs 5,600 crore to investors.
Ban on e-series
Under the notification, the Government has also banned NSEL from trading in e-series contracts.
The e-series contracts are investment products that enable investors buy and sell only metals in different forms.
The e-series product is available for gold, silver, copper, lead, nickel and platinum.
“No further or fresh one day forward contract in any commodity shall be undertaken on NSEL without prior approval of the Government,” the notification said.
FMC will supervise settlement of all outstanding one day forward contracts at NSEL.
“Any order or direction of FMC will be binding upon the NSEL and any person, intermediary or warehouse connected with NSEL,” it said.
On July 31, the NSEL had announced that it has suspended trading in all their contracts, other than the e-series contracts and merged the settlement and delivery of all pending contracts and to defer it for 15 days, triggering concerns of payment default.
The Government had asked FMC to look into the issue then.
But the FMC lacked powers to regulate the spot exchange like NSEL.