The Securities and Exchange Board of India (Sebi) is reportedly considering relaxing short-selling restrictions across most stocks, according to a report by The Economic Times. This comes after the broking industry raised concerns over uncertainty caused by Sebi’s January 2024 proposal, which sought to ban short-selling in stocks that are not part of the futures and options (F&O) segment.
Key Highlights of the Proposal:
- Expanded short-selling permissions: Sebi may allow short-selling in all stocks except those in the trade-to-trade (T2T) segment.
- Institutional investor disclosures: These investors will need to disclose upfront if a transaction is a short sale at the time of placing the order.
- Retail investor reporting: Retail traders will have to disclose their short-sale positions by the end of the trading day.
- Brokers’ reporting obligations:
- Brokers must collect and submit scrip-wise short-sell positions to stock exchanges before the next trading session.
- Stock exchanges will publish consolidated data weekly, with review provisions under Sebi’s supervision.
The proposal was discussed in a meeting of the Sebi-appointed Secondary Market Advisory Committee (SMAC). If implemented, it could enhance market efficiency and transparency, while broadening investor participation in short-selling strategies.
Disclaimer: The information provided is for informational purposes only and should not be considered financial or investment advice. Stock market investments are subject to market risks. Always conduct your research or consult a financial expert before making investment decisions.
