SEBI issues reminder after FPIs found short-selling stocks: Report
SLB mechanism, introduced about a decade ago, had permitted FPIs to sell borrowed shares.
December 13, 2019 / 11:46 AM IST
The Securities and Exchange Board of India (SEBI) has alerted concerned local and international regulators about unauthorised trading practices by foreign portfolio investors (FPIs) on the Indian exchanges, the Economic Times reported.
As per SEBI guidelines, FPIs are barred from short selling stocks. In an email, the watchdog has asked the concerned custodians, which liaison offshore funds and the Indian market, to follow rules.
Moneycontrol could not independently verify the report.
The paper quoted a source as saying that while SEBI may have spotted a few stray incidents and the practise may not be widespread.
SEBI did not respond to the paper’s queries.
A SEBI statement which came in November-end reiterated guidelines which stated that FPIs were disallowed from to short-sell in the Indian market, except as specified under the Securities Lending & Borrowing (SLB) framework.
Introduced almost 10 years back, the SLB framework allows FPIs to sell borrowed shares.