NSEL at no point of time was raising any money and the trading client through NSEL was totally legal.

1. THE NSEL CRISIS WAS
MISINTERPRETED &
MISUNDERSTOOD (PART-2)

2. Contents
Introduction
Forward Markets Commission (FMC) was in the know of the NSEL Business
NSEL Took SUFFICIENT Measures soon after the Crisis
NSEL adhered to the Settlement Schedule
NSEL Board monitored the Business
FTIL’ s Limited does not benefit from NSEL
FTIL Stands by nsel in it’s time of crisis

3. Introduction
NSEL has neither borrowed nor lent money to any Trading Client
or Broker.
In the aftermath of the sudden stoppage of contracts, some of the
trading clients were caught up in a liquidity trap.
 That ultimately led to a payment problem.

4. FMC was in the know of the NSEL
Business
 The FMC was the designated agency in since 2011 to which the
spot exchanges were to submit periodic information on all business
undertaken.
NSEL submitted periodic reports to the Government and the FMC
on every aspect of the business.
The FMC did not point out any irregularities in the same.

5. NSEL took sufficient Measures soon
after the Crisis
Under the aegis of the FMC, NSEL had organized a joint meeting
of all the stakeholders for their claims.
After due consultation, a payment schedule was prepared, which
was prepared by the FMC.

6. NSEL adhered to the Settlement
Schedule
Every effort was made by NSEL to implement the payment
schedule that was drawn.
 The Trading Clients were caught in a liquidity trap due to sudden
stopping of the contracts based on the instruction of the
Government.
 Members tried to cover their exposure by migrating stocks and
other collaterals which adversely affected the payment schedule.

7. NSEL Board monitored the Business
The FMC, since it began to seek information on spot exchanges
was directly contacting the MD and CEO of NSEL on all aspects
regarding information, clarifications, receiving responses, etc.
At no time until July 2013 did the FMC had give any indication of
sudden stopping of the contracts.
Neither the FMC nor the Government had written to the Board of
NSEL or the promoters about any deficiencies that it might have
perceived in the functioning of NSEL.

8. FTIL’s limited does not benefit from
NSEL
 For FTIL, NSEL is just a subsidiary, exploring the opportunities
in the spot market segment.
Investigation agencies have done a thorough search of the money
trail, which was all traced to the defaulters and not even one rupee
to the promoter.
The impression that FTIL has benefited from NSEL is totally
misplaced and unfounded.

9. FTIL Stands by NSEL in it’s time of
crisis
FTIL has provided a without prejudice loan of Rs. 179 crore to
NSEL to pay their trading clients.
Brokers are yet to provide details on the disbursement of these
monies to small traders since privity of contract was between
Broker and Trader.