India has extended the tenure of securities lending and borrowing transactions to 12 months from the existing 27-weekly/monthly series, with a range from one week up to 12 months.
Under the new rules, the return of securities can take place up to three working days before the corresponding stock return day of the respective series. If the securities return day is a holiday, then the securities return will take place on the immediate next working day.
In the event a lender fails to deliver securities in the settlement, then the SLB transactions shall be closed-out at a higher of the following rates: 25% of closing price of the security on T+1 (closing price for the security in the equity cash market of the Bombay Stock Exchange) or the highest rate of the security from the trading day to T+1 day minus T+1 day closing price of the security.
The changes in the tenure of contracts and close outs will be effective for transactions done Sept. 3 2012.
(JDC)