Business Standard

Short-sale of liquid ETFs gets Sebi nod

Related News

Marker regulator Securities and Exchange Board of India (Sebi) on Thursday said index exchange traded funds (ETFs) would be eligible for trading in the securities lending and borrowing (SLB) segment. The move would facilitate short-selling in the ETF segment.

Sebi, however, has said only would be allowed under SLB. “An index ETF shall be deemed ‘liquid’, provided the Index ETF has traded on at least 80 per cent of the days over the past six months and its impact cost over the past six months is less than or equal to one per cent,” the regulator said in a circular.

“Position limits for SLB in respect of ETFs shall be based on the assets under management of the respective ETF,” it added.

Under the SLB mechanism, investors can lend their idle shares to borrowers through the clearing corporation of a stock exchange, to earn interest. The borrowers, on the other hand, can trade, typically go short, in such securities. Short-selling refers to selling of a stock that is not owned by the seller at the trading time.

further tweaked the SLB framework to allow rollover facility for lenders and borrowers. Sebi has allowed lenders or borrowers of shares to roll over their positions once the tenure of the contract comes to an end.

Read more on:   
|
|
|
|

Short-sale of liquid ETFs gets Sebi nod

Marker regulator Securities and Exchange Board of India (Sebi) on Thursday said index exchange traded funds (ETFs) would be eligible for trading in the securities lending and borrowing (SLB) segment. The move would facilitate short-selling in the ETF segment.

Marker regulator Securities and Exchange Board of India (Sebi) on Thursday said index exchange traded funds (ETFs) would be eligible for trading in the securities lending and borrowing (SLB) segment. The move would facilitate short-selling in the ETF segment.

Sebi, however, has said only would be allowed under SLB. “An index ETF shall be deemed ‘liquid’, provided the Index ETF has traded on at least 80 per cent of the days over the past six months and its impact cost over the past six months is less than or equal to one per cent,” the regulator said in a circular.

“Position limits for SLB in respect of ETFs shall be based on the assets under management of the respective ETF,” it added.

Under the SLB mechanism, investors can lend their idle shares to borrowers through the clearing corporation of a stock exchange, to earn interest. The borrowers, on the other hand, can trade, typically go short, in such securities. Short-selling refers to selling of a stock that is not owned by the seller at the trading time.

further tweaked the SLB framework to allow rollover facility for lenders and borrowers. Sebi has allowed lenders or borrowers of shares to roll over their positions once the tenure of the contract comes to an end.

image

Read More

BSE launches carbon index

Premier bourse BSE, in collaboration with the UK government, today launched BSE Carbonex, the first-of-its-kind index in India or any emerging market ...

Recommended for you

Quick Links

Market News

Nickel rises by 0.1% on Asian cues

Traders strengthened positions amid a firming Asian cues

Oil prices rise further in Asia

Expectations of a decline in US crude inventories and robust economic data from the eurozone helped prices

Markets remain rangebound; HUL up over 2%, Hindalco dips 1%

Investors are optimistic about a possible solution between Greece and its international creditors to avert a debt crisis

Pharma shares in focus; Aurobindo Pharma hits new high

JB Chemicals, Alembic Pharma, Aurobindo Pharma, Ipca Laboratories and Dishman Pharma were up 3%-11% each.

Infinite Computer gains on board approval for share buyback proposal

The stock spurted 5% at Rs 171 after the board approved the buyback of shares at a maximum price of Rs 220 per share from the open market ...

 

Back to Top