SEBI focused on deepening cash equities market to spur capital formation

Tuhin Kanta Pandey, Chairman, SEBI, has stated that we are focused on deepening our cash equities market to spur capital formation. An active Securities Lending and Borrowing scheme is critical for improving price discovery and facilitating interlinkage between the cash and derivatives segments. From a borrower?s perspective, it facilitates the settlement of securities sold short, while lenders can earn a fee on their idle securities. The framework for short selling was introduced in 2007 and has remained unchanged since then. Further, the Securities Lending and Borrowing Mechanism or SLBM was introduced in 2008 and modified a few times subsequently. However, this segment remains significantly underdeveloped as compared to other jurisdictions. We will soon form a working group to comprehensively review short selling and the SLBM frameworks.

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