The Government’s directive to the National Spot Exchange, an online electronic spot exchange, to stop launch of new contract on the exchange platform will not affect trading.
Anjani Sinha, Chief Executive Officer of the exchange, told Business Line that there is no concept of contracts expiring on the exchange’s platform unlike in futures market where every contract expires on a particular date.
“As of now, all the contracts listed on the exchange continue to be traded. We are seeking a clarification from the Government what it means by new contract launch as there is no expiry of old contracts,” he said.
However, the exchange will submit an undertaking that the new contract will not be launched until further instruction from the concerned authority. NSEL records a daily turnover of Rs 600 crore with agriculture commodity accounting for Rs 300-400 crore. Metals and energy contribute the rest.
The turnover of gold traded on the exchange platform has fallen substantially in last three to four months after prices tanked.
The spot exchange, jointly promoted by Financial Technologies and National Agricultural Co-operative Marketing Federation (Nafed), is a national-level institutionalised electronic spot exchange.
The exchange, which was working independently, will now be regulated by the Forward Markets Commission.
Asked about the trigger for the Government move to bring spot market under the regulator, Sinha said that the online spot exchange, started in 2008, has evolved over the years and the Government might have now thought it fit to bring the platform under the commission.
“I expect the confidence of trading members to grow further after the Forward Markets Commission comes into the picture,” he said.
The Tamil Nadu Co-operative Marketing Federation has recently purchased onion and potato from the exchange platform for sale in the retail market at a lower price.