FMC’s Partisan Attitude in NSEL Case

the target book reviews

I am reading this new interesting book on the exchange market. Since I am not an investor, it can get a quite complex but I enjoyed this book, because the writer Shantanu Guha Ray wrote it so well, that I could read ‘The Target’ and empathize with Jignesh Shah and his company FTIL Group.

I would like to mark my protest at the way this Forward Markets Commission treated the NSEL crisis. How is it that a regulatory body suddenly recommend a closure without validating its facts – because if it did, then they would have realized that they are unclear with their regulatory norms. Now, here is a governing body that is unsure of the rules that drive an exchange. But, what was even more shocking is that they did not show the same treatment to NSpot – a venture run by NCDEX which has been promoted by NSE Group. That got me thinking that maybe that this book on Jignesh Shah is not one-sided but more a case of unheard story. I realized that NSpot was allowed to close gradually over one and half year post the NSEL crisis. Another outrageous fact was that the FMC did not initiate any action against them.

So two commodity spot exchanges, governed by the FMC – but they were treated like differently. NSpot was given a smooth closure. NSEL was given an abrupt closure, leading to the payment default crisis.

For more information read The Target Book.

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