NSEL asked not to launch new contracts

National Spot Exchange has been asked not to launch new contracts until further instructions from the government.

NSEL has received orders from the Consumer Affairs Ministry for violating certain rules while offering commodity contracts.

"We are in receipt of a letter from the Department of Consumer Affairs. According to the said letter, we have to submit an undertaking that new contract shall not be launched until further instruction from the concerned authority," the exchange said in a press release.

However, the existing business in the running contracts traded on the spot exchange will continue without any disruption, it added.

It said the bourse has also been asked to give an undertaking that existing contracts should be settled on the due date.

"Since spot exchanges do not have any such concept of contracts with "Due date" (unlike futures contracts) traded on its platform and hence we are seeking necessary clarification in this regard," the release said.

The spot exchange said it will comply with all directions issued by the concerned authorities in this regard.

Meanwhile in a filing to the BSE, Financial Technologies (FTIL), promoter of NSEL informed that the exchange has received the letter with directions from the consumer affairs ministry.

"NSEL being a material subsidiary of he company has received letter from Department of Consumer Affairs, for which NSEL has issued the pesss note and the contents of the same are self-explanatory," FTIL said.

NSEL, which achieved a turnover of Rs 600 crore in the last fiscal, has more than 65 running contracts on the exchange.