Commodity market regulator Forward Markets Commission has instructed the beleaguered National Spot Exchange to repay small investors with exposure of less than Rs 10 lakh first. Nearly half of the 13,000 investors waiting for payment fall under the ‘small investor’ category.
Speaking to Business Line , Ramesh Abhishek, Chairman, Forward Markets Commission, said depending on the fund flow, it should take about ten days for the exchange to clear small investors’ dues.
“The exchange will open an escrow account by tomorrow (Tuesday) and start depositing the money it receives as settlement. Simultaneously, it will prepare the list of small investors and repay them,” he said, after a meeting with the exchange and investors on Monday.
FMC will also issue summons to two large investors who skipped the joint meeting on Sunday. “While one investor could not be contacted, the other cited a prior appointment with income-tax officials for not turning up. Since we are not convinced with the reasons, we will issue summons to both these parties,” he added.
Meanwhile, the exchange has set up an independent committee to oversee the settlement process of dues to investors. The panel consists of Sharad Upasani, former Maharashtra Chief Secretary, Justice R.J. Kochar, former Judge, Bombay High Court, G.N. Bajpai, former SEBI Chairman, and D. Sivanandan, former Director General of Police, Maharashtra.
Drawing a parallel to the London Metal Exchange’s tin crisis (in 1985), Jignesh Shah, Chairman of Financial Technologies, said, “We will come out with a member-wise report on net obligation by August 14,” he said.
Without divulging panel members’ remuneration, Shah said whatever the payment may be it will be footed by the exchange. Asked on the future of NSEL post-crisis, Shah said currently there is a regulatory vacuum. “We will wait for the Government regulation, till then we will continue with the e-series in the metal space,” he said.