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Sebi To Ease Regulations For Securities Borrowing, Lending

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The Securities and Exchange Board of India (Sebi) said on Thursday, 30 May '2013 it would increase the number of stocks that are allowed to be used for borrowing and lending, thus relaxing short-selling rules.

Sebi said it would allow stocks that meet several criteria, including average monthly turnover of at least Rs 100 crore, to be used under the country's securities lending and borrowing (SLB) programme.

Until now, a limited set of stocks that traded in the futures and options markets were allowed to be borrowed and lent.

The SLB programme was launched by Sebi in 2008 to improve its oversight of the short-sale of stocks, but the mechanism has been criticised by investors for being too stringent.

Separately, the regulator also relaxed regulations for share sales done via the offer for sale (OFS) mechanism.

Companies will now be allowed to announce an OFS with less than a day's notice as opposed to the prior guideline that mandated such announcements be made at least 24 hours before the opening of the offer.