NSEL halts trading in e-series contracts as well
Moneylife Digital Team 06 August 2013

E-series contributed about 40% of NSEL’s turnover of Rs18,315-crore in June

National Spot Exchange Ltd (NSEL) on Tuesday stopped trading in the last available e-series contracts of items like gold and silver on its bourse, in anticipation of the government’s order banning trade of these products.

 

The development has led to a complete halt of operation on NSEL platform as the exchange on 31st July had suspended trading of all contracts other than e-series contracts.

 

NSEL offers e-series contracts in gold, silver, copper, zinc, lead, nickel and platinum. Under e-series contracts, retail investors can buy and sell commodities in demat form.

 

E-series contributed about 40% of NSEL’s Rs18,315-crore total turnover in June.

 

“We have not yet received Government order, but as abundant precaution, we will not commence trading in e-series at 10am,” NSEL said on its website.

 

The exchange said, “It will check with the authorities to find out the facts. In any case we will fully comply with the government order.”

 

A company spokesperson said the entire trade is suspended on NSEL today.

 

E-series contracts is a unique market segment, which functions like the cash segment in equities, but offers commodities in the demat form in smaller denominations.

 

The clearing and settlement, pay-in and pay-out mechanism on the NSEL is based on T+2 (settlement in 2 days) cycle.

 

NSEL is currently grappling with the problem of payment settlement of an estimated Rs 6,000 crore to the investors after the suspension of trade.

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