Multiple agencies to start proceedings against NSEL

The report on the National Spot Exchange Limited (NSEL) crises has been submitted to Prime Minister via the Finance Minister and the FM is likely to take a decision on the matter.

The report lists that the NSEL crises has likely violated the Prevention of Money Laundering Act (PMLA Act), the Securities Contracts (Regulation) Act (SCRA Act), the Income Tax Act. The report has also suggested some immediate action that can be taken.

This immediate action is going to be taken by the respective investigative agencies. For instance, the enforcement directorate (ED) will file FIRs. The IT department has already initiated action against NSEL and Financial Technologies and the third key component is the Forward Markets Commission (FMC).

Sources have said that the FMC is examining the fit-and-proper-criteria as per the National Exchange policy. If the commission does not meet this fit-and-proper-criteria,  then they may have to divest their stake in MCX .

According to the guidelines, for a person to be categorised under the fit-and-proper criterion, he/she should not have committed any economic offence; should have financial integrity and should not have been convicted by a court. Financial Technologies , the promoters of NSEL, may not meet some of these criteria, add sources.

Hence, it is a collective action that agencies including the FMC, ED, Serious Fraud Investigation Office (SFIO) and the Income Tax Department will be taking against NSEL.

The report, additionally, suggests some short-term as well as long-term measures. Long term measures will be on systemic stability, though the report is saying that there are no large systemic implications of the matter since it is only Rs 5000 crore matter. (CNBC)