National Spot Exchange Ltd today 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 had on July 31 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 per cent of NSEL’s Rs 18,315-crore total turnover in June.
Sources had said yesterday that the Consumer Affiars Ministry is likely to ban trading in e-series contracts as well and a notification in this regard is expected to be issued soon.
“We have not yet received Government order, but as abundant precaution, we will not commence trading in e-series at 10 a.m.,” 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.