Indian commodity exchange investigated - FT.com Shares in Financial Technologies, an Indian bourse operator, dropped by more than 60 per cent after its National Spot Exchange Limited commodity exchange suspended trading on most contracts following a government investigation. Financial Technologies operates NSEL, India's largest spot commodities exchange, alongside Multi Commodity Exchange, the country's leading general commodities bourse. IN Developing Markets & Asia In a statement on Wednesday evening, NSEL, which offers spot contracts in a variety of agricultural goods and metals, said it had suspended trading "in view of the grave emergency that has emerged in the market." NSEL said the suspension followed an investigation by India's Department of Consumer Affairs relating to concerns over longer-term forward contracts offered on the exchange, rather than traditional short-term spot contracts. Chief executive Anjani Sinha said that the exchange faced outstanding liabilities of Rs55bn ($911m), but that it held a physical stock of commodities worth Rs62bn, that it could sell if needed. Market observers said, however, that the sharp fall in Financial Technologies" share price reflected concerns that the organisation may not be able to meet its outstanding obligations. The head of one Mumbai-based brokerage, speaking on condition of anonymity, said: "There is no systemic risk from this, because it is a small part of the overall market, but the worry is that there is inadequate collateral to cover the outstanding trades." Jignesh Shah, chairman of Financial Technologies, said: "We are confident that NSEL will resolve the situation within the contours of its bylaws and rules." Financial Technologies is one of India's fastest growing market operators, gaining particular prominence this year when its Multi Commodity Exchange of India subsidiary launched MCX-SX, the country's third equities bourse. Shares in Financial Technologies dropped 64.5 per cent to Rs191.65, while MCX fell 20 per cent to Rs510.5. Shreekant Javalgekar, chief executive of MCX, said: "There will not be any impact of NSEL's circular on the operations and financials of MCX."