BSE to launch roll-over facility in SLB from tomorrow

Under roll-over facility, lenders of securities would be allowed to extend an existing position

In a bid to increase participation in the stock lending and borrowing (SLB) market, leading stock exchange BSE will introduce the roll-over facility under this scheme from tomorrow.

SLB mechanism allows short sellers to borrow securities for making delivery. The rollover facility in the SLB session will be available for a three-month period (original contract plus two roll-over contracts).

Under the roll-over facility, lenders of securities would be allowed to extend an existing position. It means that lenders who are due to receive securities can now extend the period of lending.

Similarly, a borrower who has to return borrowed securities can extend the period of borrowing.

"... The roll-over facility in SLB segment will be launched with effect from September 7, 2015," BSE said in a circular.

Besides, a mock trading session was conducted on Saturday to check the system performance.

Earlier in May, National Stock Exchange (NSE) had launched a roll-over facility in its SLB scheme.

Currently, the country's SLB market is very shallow.

In November 2012, capital markets regulator Securities and Exchange Board of India (Sebi) had allowed roll-over facility in SLB scheme.