The Securities and Exchange Board of India (SEBI) will increase the number of stocks that qualify for its stock lending and borrowing(SLB) scheme by relaxing eligibility rules, which will be effective July 1 of this year.
The SLB scheme was launched by SEBI in 2008.
In addition to stocks with derivatives contracts, the new criteria include stocks that have an average monthly turnover of at least Rs. 100 crore ($17.6 million), have a market-wide position limit (MWPL) of at least Rs. 100 crore, or are defined as a Group I security. Group 1 securities have trading frequency of at least 80% and an impact cost less than or equal to 1% in the previous six months.
Collateral for margin obligations related to SLB transactions must meet the same requirements as cash market collateral.
SEBI’s circular also specified that stock exchanges must review eligibility on a half-yearly basis, and that when a scrip violates eligibility rules, “no SLB trading shall be allowed in the scrip from the next trading day.”
India Increases Number of Stocks Eligible for Securities Lending
The Securities and Exchange Board of India (SEBI) will increase the number of stocks that qualify for its stock lending and borrowing(SLB) scheme by relaxing eligibility rules, which will be effective July 1 of this year.