The Forward Markets Commission (FMC) has asked the National Spot Exchange (NSEL) to create an escrow account to settle all claims after it emerged that the corpus of the bourse's Settlement Guarantee Fund was Rs 65 crore, compared to its claims of over Rs 800 crore on Thursday.
NSEL MD and CEO Anajani Sinha, however, played down the concerns saying there was no reason to worry. Sources said the fund's corpus was revealed by the exchange during meetings it had with FMC on Sunday. The Settlement Guarantee Fund is used as a protection in case of a default either by the buyer or the seller. It can be used in a crisis like the one confronting NSEL currently.
Sinha told TOI over the phone that the situation was neither unique, nor worrisome. Most of the contribution to the fund comes from margins paid by buyers. "In a crisis situation, there can be pressure on the system and the cash margin of brokers was used... Once trading starts, we will rebuild the fund," he said. On July 29, the corpus was estimated at Rs 839.53 crore, according to information posted on NSEL website.
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