NSEL, a spot exchange or a NBFC ?
Ringa ringa roses…..all fall down! The music has stopped on the NSEL the verdict is out: sellers have become lenders and have to fend for them to recover or enforce obligations from the buyers or borrowers. Looking at the position that NSEL has assumed and situation unwind, I fail to accept why participants should be called buyers or sellers while they have been lending and borrowing with an underlying commodity! NSEL is just proving itself to be a pass through intermediary and its platform an unregulated NBFC providing commodity secured (?) funding for the buyers and run a carry trade. It all went sell until the commodity prices inverted. Let us think of a few matters that any lender or fund manager, that offer investment financial products to small investors, would have thought of in the course of its respective lending operations or its investment advice: · Borrower due diligence process. · ...