Crisis-hit National Spot Exchange Ltd (NSEL) today announced a faster route to settle dues of investors in e-series products like gold and silver by way of a financial settlement during October 3-9.
E-series contracts are those in which retail investors can buy and sell commodities in demat form.
NSEL, promoted by Jignesh Shah-led Financial Technologies (India) Ltd, is facing problem of settling Rs 5,500 crore to 13,000 investors after the exchange suspended trading in all contracts, including e-series products like gold and silver.
"In order to offer a fast exit route to unit holders, the exchange has made an arrangement of providing exit option to all E-series holders of gold and silver units by way of financial settlement (encashment of E-Series units)," the NSEL said in a circular.
The financial settlement would be made during five working days starting October 3 to those investors who wish to redeem their gold and silver holdings, it said.
As per the new mechanism, investors can redeem their holdings during the October 3-9 period (excluding Saturday and Sunday) at a price arrived at each day based on landing cost of gold and silver in India on the London spot fixing price.
The new plan has been worked out as the current process of converting the demat certificates into physical delivery is taking time as investors are required to submit a 'surrender request form (SRF)' to redeem their holdings.
"Due to heavy redemption pressure, this process is taking substantial time," the exchange said.
To ensure a transparent financial settlement of e-series contracts, NSEL said the existing procedure of converting demat certificates into physical conversion through SRFs will be discontinued for time being.
It also cancelled all existing pending SRFs.
The new settlement mechanism for e-series investors has been worked out after considering the feedback received from all market participants and after due discussions and deliberations with the prospective buyers, it added.
NSEL has announced weekly payments of dues to investors who traded in contracts, excluding e-series. So far, investor dues worth Rs 148 crore have been settled over the past six weeks, much less than the total scheduled amount of Rs 1,047.12 crore.