The spot exchanges are electronic spot trading platforms combining best features of financial markets and spot markets. Being electronic in nature the reach of NSPOT is practically every nook and corner of the world where there is internet. Thus, this market reaches far beyond widens the physical realms of a normal spot market.
The Spot Exchange operations are regulated in each state by the respective state governments and are subjected to various laws of the land like the Companies Act, Stamp Act, Contracts Act, APMC Act and others which impinge on its working.
NSPOT by nature are membership based self regulated organizations (SRO) working within the frame-work of existing rules and regulations. NSPOT combine the stringent standards of a financial market for risk management and counter party guarantee and offers markets that are closer to spot markets.
NSPOT. have received exemptions under Forward Market Contracts Regulations Act (FCRA) clause 27 for running daily spot markets where squaring off is allowed. Usually, any contract where squaring off is allowed comes under FCRA. All markets where FCRA is applicable are regulated by Forward Markets Commission (FMC). Thus, exempting spot exchanges from regulations under FCRA by FMC. However, this exemption is applicable provided all contracts at the end of the day results in compulsory delivery and there is no short selling.
The Exchange operations are regulated in each state by the respective state governments and it is subjected to various laws of the land like the Companies Act, Stamp Act, Contracts Act, APMC Act and others which impinge on its working.
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