Sebi to ease regulations for securities borrowing, lending

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

The market regulator 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.

Sebi launched the SLB programme 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, Sebi 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.

Copyright @ Thomson Reuters 2013