SEBI tightens norms governing short-selling

New Delhi, January 5

Markets watchdog SEBI on Friday said institutional investors have to disclose upfront at the time of placing an order whether a proposed transaction is a short sale or not, a significant move aimed at curbing market volatility.

Move aimed at curbing volatility

• Retail investors, however, would be permitted to make a similar disclosure by the end of the trading hours on the transaction day
• Short-selling refers to selling a stock which the seller does not own at the time of trade
• Both retail and institutional investors are permitted to short-sell stocks

The SEBI has made certain changes with respect to norms pertaining to short- selling in the market.

“The brokers shall be mandated to collect the details on scrip-wise short-sell positions, collate the data and upload it to the stock exchanges before the commencement of trading on the following trading day. “The stock exchanges shall then consolidate such information and disseminate the same on their websites for the information of the public on a weekly basis,” it said.