Some NSEL members to settle contracts in months

MUMBAI (Reuters) - The National Spot Exchange Ltd (NSEL) on Sunday said most of its trading members had proposed settling outstanding contracts over several months after the commodity exchange suspended trading in most forward contracts.

Thirteen members would pay five percent of their outstanding obligations, a total of 31.07 billion rupees, weekly, and eight members, with contracts amounting to 21.8 billion rupees, would settle outright.

NSEL said it had yet to reach agreement with three of its members with outstanding obligations of 3.1 billion rupees.

The agreement between trading members and representatives of the regulatory body, Forward Markets Commission (FMC), followed meetings on Sunday, NSEL said. Counterparties needed to agree the proposals, a spokesman said.

Shares in NSEL owner Financial Technologies (India) Ltd have fallen 73 percent since the exchange suspended trading in the contracts on Wednesday.

The FMC Chairman Ramesh Abhishek told Reuters on Friday the commodities regulator was ready to act should NSEL counterparties default on their obligations.

"If they default, there will be consequences. And if people are sitting with money and they don't return or don't meet their obligations, they will also face consequences," Abhishek said.

The FMC is ready to provide the government with its report on the NSEL settlement process by early next week, he said.

NSEL said on Sunday it stands ready to ensure trading members settle outstanding contracts. The government asked NSEL on Thursday to detail its plan after the trading suspension, which the exchange said was due to a drop in volumes.

"The Exchange is fully committed to ensure proper settlement of all outstanding obligations and to comply with the directions issued by the Government in this regard and to settle all issues as per Rules and Bye laws of the Exchange," it said.

(Reporting by Siddesh Mayenkar; Editing by Louise Ireland)