2.  Department of Consumer Affairs, MCA, Food & Public Distribution, Government of India wrote to the Chairman, FMC stating as subject “Regulation of National Spot Exchanges” & as text that “the competent authority has decided to nominate the FMC as a designated agency for providing ‘oversight over the spot exchanges’...”.

3.  FMC wrote to DCA for RBI to consider to write to the government  They wrote to exempt spot exchanges regulated by FMC from purview of Payment & Settlement Systems Act, 2007  It had also mentioned that spot exchanges would be substantially regulated by them

4.  In this letter issued by FMC to the MD, NSEL  It was communicated that FMC was nominated as a designated agency for providing oversight over the spot exchanges  Further they added that exchanges would be required to forward a return on a fortnightly basis to the Commission

5.  Despite all this, DCA issued a Show Cause Notice to NSEL on 27 th April 2012  Notice was in regard to trading of certain contracts marketed by brokers  NSEL provided a detailed explanation soon after vide its letter dated 23 rd May 2012  And on 11 th August 2012, NSEL provided a further follow up reply

6.  Thereafter, for more than a year, there was no response of any sort from FMC  In between, NSEL was regularly reporting to the FMC on various aspects of exchange operations  Reports were including submission of detailed statements on fortnightly basis

7.  All of a sudden in July 2013, DCA asked NSEL to stop issuing fresh contracts  All this shows how DCA/FMC had no material reason to stop trading of certain contracts  It jeopardized the smooth flow of trading & disrupted the settlement system