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Tuesday, November 4, 2008

[SEBI] SLB to 30 days & normal trade timings

Sub: Review of Securities Lending and Borrowing (SLB) Framework

The framework for SLB was specified vide circular no. MRD/DoP/SE/Dep/ Cir- 14 /2007 dated December 20, 2007. SLB was operationalised with effect from April 21, 2008. Pursuant to feedback from market participants and proposals for revision of SLB received from NSE and BSE, the framework is being revised as under:

  1. Tenure

Tenure for SLB may be increased to 30 days from the present 7 days.

  1. Corporate Actions during the 30 day SLB contract

The SLB tenure of 30 days will result in the need for appropriate adjustments for corporate actions. The corporate actions may be treated as follows:

a. Dividend: The dividend amount would be worked out and recovered form the borrower at the time of reverse leg and passed on to the lender.

b. Stock split: The positions of the borrower would be proportionately adjusted so that the lender receives the revised quantity of shares.

c. Other corporate actions such as bonus/ merger/ amalgamation / open offer etc: The transactions would be foreclosed from the day prior to the ex-date. The lending fee would be recovered on a pro-rata basis from the lender and returned to the borrower.

  1. Time window for SLB

The time for SLB session may be extended from the present one hour (10 am to 11 am) to the normal trade timings of 9:55 am to 3:30 pm.


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