NSEL e-series trade halted

MUMBAI: The government on Tuesday virtually shut down National Spot Exchange (NSEL), which is at the centre of a payment crisis , by ordering the bourse to suspend trading in e-series of contracts. With the regular contracts on commodities already suspended on July 31 by the exchange, the withdrawal of trading in the e-series , which is backed by demat receipts for gold, silver, platinum etc, means there would be no more trade on NSEL till further orders.
That's not all. Market regulator Sebi has asked NSDL and CDSL, the two depositories which facilitated e-series contracts on NSEL, to give a detailed report about the physical stocks of commodities related to the bourse. The stock of Financial Technologies , which owns NSEL, closed 19.7% lower in a weak Mumbai market.
A release from NSEL said that investors holding stock (in demat form) can apply for converting the same into physical form and the bourse will facilitate the same. Another alternative is that investors can continue to hold the stock in demat form.
Interestingly, the release also said that although NSEL did not receive any orders from the government to stop trading in its e-series contracts, "as an abundant precaution" it shut down trading in these contracts . "We will check with the authorities to find out the facts, and accordingly, we will fully comply with government order ," the release said.
The suspension of "e-series" contracts comes after NSEL stopped trading in oneday forward contracts last week citing a fall in volumes after the commodities regulator asked the exchange not to launch new forwards contracts , sending shares of owner Financial Technologies down 73% over Thursday and Friday.