Information is Wealth An organized collection of data Maybe one day we'll find the place where our dreams and reality collide Stay Connected Your Search ends here !
Monday, August 5, 2013

FMC asks NSEL to create escrow account to settle all claimsThe National Spot Exchange (NSEL), which last week suspended trading amid talks of a payments crunch, has been asked by the Forward Markets Commission (FMC) to create an escrow account to settle all claims.


The NSEL has been asked to create a new safety net after it came to light that there was just Rs 65 crore in the exchange's Settlement Guarantee Fund (SGF), less than tenth of its claims of more than Rs 800 crore.


The SGF works as a safety net for investors in case of a crisis or default by the buyer or seller. Most of the contribution to the SGF is generated by margins paid by buyers.


However, NSEL managing director & chief executive Anajani Sinha played down the worries saying the condition was neither unique nor troublesome.


When contacted, Sinha said, "In a crisis situation, there can be pressure on the system and the cash margin of brokers was used... Once trading starts, we will rebuild the fund."


Last week, a day after the exchange suspended trading, Sinha had said that physical stock of goods was used to cover market participants' exposure.


Meanwhile, FMC is preparing to meet with 21 bulk buyers and sellers of commodities along with NSEL officials and brokers to resolve the claims settlement issue.

0 comments:

Post a Comment