Sebi says no systemic risk, FMC asks NSEL for plan to settle pending contracts

The Forward Markets Commission (FMC) on Friday said it asked the National Spot Exchange Limited (NSEL) to come up with a plan of action to settle outstanding contracts and to confirm it had R6,200-crore worth of commodities. Ramesh Abhishek, chairman, FMC, clarified it was the responsibility of the exchange to ensure that the stocks were in place, adding that in the event of any default, the exchange would auction stocks to ensure transactions were settled.The FMC’s observations came in the wake of concerns in financial and commodities markets that NSEL might not have adequate stocks to settle outstanding contracts worth R5,500 crore. On Wednesday, NSEL was forced to suspend new contracts and defer settlements after the government said it was violating rules by allowing contracts of tenures longer than 11 days. “We were of the view that the exchange was violating rules on forward contracts based on which the government took action,” Abhishek told FE, adding that NSEL seemed to have interpreted the rules differently.

Source : Financial Express