SEBI proposes easing short selling to double borrowable NSE stocks
Securities and Exchange Board of India (SEBI) is looking to shake up the rules for short selling in India.
Right now, only 176 out of about 2,600 National Stock Exchange (NSE) stocks can be borrowed for short selling because of strict trading and liquidity rules.
The proposed changes could double that number, making it easier for investors to borrow and sell more stocks.
SEBI may relax borrowing rules
SEBI might lower the minimum trading requirement from ₹100 crore a month, plus reduce collateral requirements (currently up to 130%), potentially nearer the 100% level common in the US and European markets.
If this goes through, more stocks will be available for borrowing, giving institutional investors better tools to manage risk and letting regular investors earn by lending their shares.
SEBI hopes this will move more action into the cash market (which is safer and more transparent) instead of risky derivatives where most retail traders lose money.