Sebi, Calcutta Se At Odds Over Short Sales

The relationship between the exchange and the markets watchdog has become strained over the imposition of various corrective steps on the practice of short-selling (selling without having sufficient securities in hand).

A senior CSE official said on the condition of anonymity that Sebi officials

are not prepared to listen to the problems cited by the exchange authorities, which lead to delays in implementation of various reform measures.

In fact, it was the November 27 meeting convened by Sebi to discuss regulation of short-selling which fuelled the fire.

The Calcutta Stock Exchange authorities have, however, issued notices on Sebi's directive on short-selling and the mark-to-market margin as per the securities watchdog guidelines.

 

The authorities are, however, were forced to explain to its members why they are being called for meetings with Sebi at a time when the regulator has already come out with circulars on the subject.

According to the circular, the brokers will have submit particulars of short-sales in about 60 scrips with effect from November 30, 1996.

Apart from reporting short sales in key pivotals, brokers will have to notify short sales, if any has occured in Ashok Leyland, Bajaj Auto, Ballarpur Industries, Bharat Heavy Electricals, Britannia Industries, BSES, Colgate-Palmolive, Grasim Industries, Hindustan Lever, Larsen & Toubro, Oriental Bank of Commerce, Steel Authority of India Ltd, Sterlite Industries and Unit Trust of India stocks.

The National Stock Exchange (NSE) authorities, too, have issued a circular to implement the new Sebi directive on short-selling.

It has said that the net cumulative short-sale quantity should be calculated based on the difference between all open sell transactions and close buy transactions.