A week after getting the regulator’s okay for rematerialisation and financial closure of e-series contracts, the scam-hit National Spot Exchange Ltd (NSEL) has announced this would begin from April 12. This will be followed by financial closure of the balance stock from May 6, the exchange stated.
NSEL was hit last year by a massive payments default on its platform. The no-objection from the Forward Markets Commission came after a probe found no defaults in the e-series contracts.
The process of rematerialisation will be carried out by the exchange as put in place by the depositories. “We will accept rematerialisation intention-cum-allocation requests from unit holders between April 12 and 23. Subsequently, the exchange will commence financial closure of the balance units of e-series starting from May 6,” the exchange stated.
Unlike in the past, however, investors will not be allowed to accumulate their units with traders to make these deliverable. Instead, it is ready to settle the undeliverable quantity by cheque through relevant brokers. For example, a unit holder holds 97 grammes of gold in his account. The exchange will allow delivery of the maximum quantity of denominations of coins available in the assigned vault. If the vault possesses gold coins above 5g denomination, the unit holder will get delivery of 95g.
For the remaining two grammes, however, the holder will get a cheque from the brokers through which he traded. The price of gold will be computed as on the London Bullion Markets Association, plus the applicable duties.
“Unit holders may note that rematerialiaation will only be feasible for those unit holders who hold units either matching or exceeding the denominations offered by the exchange of the underlying metals,” the statement clarified.
The exchange said it would provide an updated location, depository and denomination-wise free stock position and the updated stock report on a daily basis.
