In July, the National Spot Exchange Ltd (NSEL) announced \u00a0that it will not offer contracts where settlement and delivery of commodities is done beyond 11 days, a move that came after the Centre ordered the bourse not to launch new contracts following violation of certain rules.<\/p>\n
Earlier in July ,\u00a0the Consumer Affairs Ministry had asked the exchange not to launch any new contracts till further instructions and also sought undertaking from the NSEL in this regard.<\/p>\n
NSEL reduces delivery, payment and settlement period of all contracts traded on the exchange to less than 11 days (T+10 or less), wherever settlement schedule was extending beyond 11 days,\u201d the exchange said in a statement.<\/p>\n
The exchange has banned \u2018intra\u2014day trading and intra\u2014day squaring off of transactions\u2019 It means every trade executed in all existing contracts (such as e-gold, e-silver, e-copper, e-zinc, e-lead, e-nickel and e-platinum) will result into delivery.<\/p>\n
Besides, the exchange \u201calso strictly prohibited short sale,\u201d the statement said. Short-selling is the sale of commodities that one does not own at the time of a contract with the hope of buying them at a lower price before the delivery time.<\/p>\n
In existing contracts, such as castor kadi and castor oil, the funds and commodity settlement will take place after two days.<\/p>\n
NSEL, which has seen huge drop in turnover following the government orders, has decided to reduce the cost of transaction for all contracts by whooping 80 per cent to boost volumes on its platform.<\/p>\n
\u201cThe cumulative cost of transaction, delivery and warehouse receipt transfer was earlier Rs 100 per 1 lakh of turnover, which has been brought down to Rs 20 per Rs 1 lakh of turnover,\u201d the statement said.<\/p>\n
Last year, the Consumer Affairs Ministry had issued a show\u2014cause notice to Financial Technologies\u2014promoted NSEL after it found violation of some conditions set by the government for operating the exchange.<\/p>\n
NSEL had allowed short sales by members and offered contracts for delivery exceeding 11 days.<\/p>\n
Source:\u00a0http:\/\/www.thehindubusinessline.com\/markets\/commodities\/nsel-modifies-commodities-contracts-as-per-law\/article4945537.ece<\/a><\/p>\n","protected":false},"excerpt":{"rendered":" In July, the National Spot Exchange Ltd (NSEL) announced \u00a0that it will not offer contracts where settlement and delivery of commodities is done beyond 11 days, a move that came after the Centre ordered the bourse not to launch new … Continue reading