National Spot Exchange

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National Spot Exchange Ltd.
TypePrivate
IndustryBusiness Services
Founded2005
HeadquartersMumbai, India
Key peopleShri Uttam Prakash Agarwal, Chairman;
Jignesh Shah, Non-Executive Director;
Shaji Cherian, MD & CEO[1]
ProductsSpot exchange
Websitewww.nationalspotexchange.com
 
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National Spot Exchange Ltd.
TypePrivate
IndustryBusiness Services
Founded2005
HeadquartersMumbai, India
Key peopleShri Uttam Prakash Agarwal, Chairman;
Jignesh Shah, Non-Executive Director;
Shaji Cherian, MD & CEO[1]
ProductsSpot exchange
Websitewww.nationalspotexchange.com

National Spot Exchange (NSEL) is a Commodities exchange in India, and is a joint venture of Financial Technologies (India) Ltd. (FTIL) and National Agricultural Cooperative Marketing Federation of India (NAFED). National Spot Exchange commenced its live trading operations in different commodities on Wednesday, 15 October 2008. It began trading in pre-certified cotton bales for Mumbai delivery and imported gold and silver bars for Ahmedabad delivery immediately, and has since added a number of commodities.

National Spot Exchange's stated mission is to develop a common Indian market by setting up a nation-wide electronic spot market and providing state of art trading, delivery, and settlement facilities in various commodities. This exchange is now in the middle of a controversy due to a major commodity scam and all the trades have been stopped.

Services offered[edit]

Facilities Offered[edit]

===== E-Series product[edit]

A new form of commodities investment: Initiative of NSEL with E-Series Products ===== ===== ==

For the first time in India, National Spot Exchange has introduced E-Series products in commodities. Retail investors can now trade and invest in commodities like they invest in equities. This will be a unique market segment, which will function just like cash segment in equities, but offer commodities in the demat form in smaller denominations.

The clearing and settlement pay-in and pay-out will be based on a settlement cycle as per the practice in the stock market. This instrument will provide ample opportunity to the masses as secured investment in their product basket of diversification.

NSEL launched its first product under the E-Series as E-Gold on Wednesday, 17 March 2010. Clients/retail investors who wish to purchase E- GOLD units are required to open their beneficiary account with NSEL empanelled Depository Participants (DPs) and disclose their client ids and DP ids to their respective members to enable them to transfer the units to the respective client’s accounts. On receipt of demat ICIN in the CM-POOL account, the member should transfer the same to the beneficiary account of the respective client.

NSEL has made necessary arrangements with National Securities Depository Limited (NSDL), and Central Depository Services (India) Ltd. (CDSL) is the depository for holding commodity units in the electronic form.

E-series trading has been suspended w.e.f 5 August 2013 till further notice.

Pursuant to Forward Markets Commission’s (FMC) NOC to NSEL, dated 27 March 2014, the Exchange had initiated the process of rematerialization from 12 April 2014 and subsequently the Exchange commenced the ‘Financial Closure’ of the balance units of e-Series starting from 6 May 2014.Infoline, India (5 April 2014). "Financial Closure of e-Series". IndiaInfoline. Retrieved 5 September 2014. 

On 23 June 2014, the Exchange completed Financial Closure of e-Gold with total payment of Rs 154.77 Crores was made to the unit holders. Likewise, on 27 August 2014, the Exchange completed Financial Closure of e-Silver with total payment of Rs 141.23 Crore.[2] The process of financial closure of Platinum, Copper, Lead and Nickel, which constitute the remaining balance 1.6% of the total value is in progress and is expected to be completed soon.[3]

Despite the crisis, the Exchange has been able to recover Rs. 354 crore till 31 May 2014 and bridge loan of Rs. 179 crores was taken from FTIL (total Rs 533 cr) and paid to investors, with which it has cleared up to 50% settlement liability of around 7,000 retail investors. The newly constituted Board of Directors is leaving no stone unturned to recover outstanding from the defaulting members with a view to restoring confidence of investors on the financial markets.[4]

Commodities traded with their delivery locations[edit]

CommodityDelivery Centre
ArecanutShimoga, Channagiri (Karnataka)
BajraJaipur (Rajasthan), HAFED Warehouses
Castor SeedPalanpur, Kadi, Jagana, Mehsana, Patan, Chandisar, Gandhidham, Visnagar, Panthawada, Sidhpur (Gujarat )
Castor OilKandla ( Gujarat )
Chana KantawalaIndore ( Madhya Pradesh)
Cotton BalesMumbai, Yeotmal, Nagpur, Wani, Amravati, Akola, Khamgaon, Dhule, Jalgaon, Aurangabad, Parbhani, Nanded, Parli (Maharashtra),Himmatnagar, Rajkot ( Gujarat), Adilabad, Nizamabad (Telangana)
Desi ChanaDelhi, Bikaner, Jaipur, Sri Ganganagar (Rajasthan), Ganj Basoda, VIdisha (Madhya Pradesh), Osmanabad (Maharashtra), Gadag (Karnataka),
GoldAhmedabad, Rajkot (Gujarat), Mumbai (Maharashtra), Kolkata (West Bengal), Hyderabad, Vijayawada (Andhra Pradesh), Chennai (Tamil Nadu), Jaipur (Rajasthan), Delhi
GroundnutJaipur, Bikaner, Jodhpur (Rajasthan), Maliya Hatina (Gujarat)
Guar SeedBikaner, Jaipur (Rajasthan)
Guar GumJodhpur (Rajasthan)
JeeraJodhpur (Rajasthan)
Lemon TurMumbai (Maharashtra)
MaizeMaheshkhoont (Bihar), Jalgaon (Maharashtra), Umerkote (Orissa), Davangere (Karnataka)
RM seedJaipur, Jodhpur (Rajasthan)
SilverAhmedabad, Rajkot (Gujarat), Mumbai (Maharashtra), Kolkata (West Bengal), Hyderabad (Andhra Pradesh), Chennai (Tamil Nadu), Jaipur (Rajasthan)
Urad FAQMumbai (Maharashtra)
WheatRajkot (Gujarat), Jaipur, Chomu (Rajasthan), Delhi, Vidisha (Madhya Pradesh)
Yellow PeasMumbai (Maharashtra)
SoyabeanGanj Basoda, Vidisha (Madhya Pradesh), Jalgoan, Nandurbar (Maharashtra)
Cottonseed Wash OilKadi (Gujarat)
RBD PalmoleinMundra- Adani, Kandla- Gokul, Kandla- GUJOIL

Trading timings[edit]

Agri-CommodityNon-Agri CommodityIntra-day (Agri & Non-agri)E-Series Product
Monday - Friday10.00 to 18.00 hours10.00 to 23.30 hours10:00 to 16:0010.00 to 23.30 hours
Saturday10.0010.00 to 14.00 hoursNo TradingNo Trading

FRAUD[edit]

Main article: NSEL scam

The first payout from borrowers on NSEL to 148 broker members, representing 13,000 investors, was unsuccessful with the exchange managing to recover Rs 92.12 crore against the Rs 174.72 crore it was supposed to pay out every week for the next five months beginning 20 August. Nine of the two dozen borrowers who defaulted are NK Proteins, ARK Imports, LOIL Overseas Foods, Lotus Refineries, NCS Sugars, Spin Cot Textiles, Tavishi Enterprises, Vimladevi Agrotech, Yathuri Associates. Of these, NK Proteins has the highest liability of over Rs 900 crore. Other officials who were removed from their positions along with Sinha are Amit Mukherjee (assistant VP, business development), Jai Bhaukhundi (assistant VP, market operations), Maneesh Chandra Pandey (manager - business development), Santosh Mansingh (assistant VP - market operations), HB Mohanty (assistant VP - market operations) and Shashidhar Kotian ( CFO).

The Criminal angle in the whole scam has come under the scanner. The Central Bureau of Investigation (CBI) as well as Economic Offences Wing (EOW) of Mumbai police are investigating the case.[5][6]

NSEL has taken considerable recovery initiatives, the Exchange has taken Legal actions against the defaulters. NSEL has filed 5 Arbitration petitions in Bombay High Court, 27 applications in MPID court and 30 complaints with the Magistrate Court with regards to bouncing of cheques. The bourse has also filed 20 complaints in EOW Mumbai Police which have not yet been registered as FIR therefore the Exchange has also filed 10 Section 156(3) applications with the Magistrate for FIR. NSEL has also issued Third Party notices to 15 Defaulters further to the Representative Suit filed by Modern India. These coordinated efforts have resulted in a historic order passed by the Bombay High Court where a Committee comprising of three distinguished persons was formed to overlook the process of asset sale and recovery from Defaulters. The senior management and Recovery team has assisted and coordinated with FMC, MAC and various investigative agencies during the probe. The NSEL Board has been reconstituted and this Board along with new Senior Management Team has been effectively guiding and executing the entire recovery process.[7]

References[edit]

  1. ^ B.S, Sunil (15 January 2014). "NSEL appoints new independent directors". Mint. Retrieved 8 September 2014. 
  2. ^ Standard, Business (24 June 2014). "NSEL pays to 70% e-silver investors". Business Standard. Retrieved 5 September 2014. 
  3. ^ Times, Economic (26 Jun 2014). "NSEL settles e-gold contracts; makes payment of Rs 154.80 crore". The Economic Times. Retrieved 5 September 2014. 
  4. ^ Rukhaiyar, Ashish (26 June 2014). "NSEL completes financial closure of e-series gold contracts". Mint. Retrieved 5 September 2014. 
  5. ^ "Jignesh Shah remanded in police custody till May 15". Retrieved 8 May 2014. 
  6. ^ "CBI FIR". Retrieved 8 May 2014. 
  7. ^ Standard, Business (September 11, 2014). "NSEL denies FMC's slow-recovery charge". Business Standard. Retrieved 14 September 2014. 

External links[edit]