sitemapHome | Registration | Job Portal for CA's | Expert Exchange | Currency Converter | Post Matrimonial Ads | Post Property Ads
News shortcuts: From the Courts | News Headlines | VAT (Value Added Tax) | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing | GST - Goods and Services Tax
Latest Expert Exchange
« General »
 The Central Board of Direct Taxes unveiled new Income Tax Return forms for assessment year 2018-19 on 5 April. Although the manner of filing returns remains the same as compared to last year, certain changes have been incorporated in the new ITR forms.
 Income Tax efiling: Must-do steps to file your IT return for FY 2017-18 on time till you get Form 16
 What are the tax filing deadlines for financial year 2017-18?
 How income tax department can penalise you for under-reporting, misreporting income
 Start your tax planning right now
 Government confident of meeting fiscal deficit, tax revenue targets
 Clarification with respect to the E-way Bill System
 Here is how you can save on taxes
 Here’s all you should know about filing Income Tax Return before March 31
 Tax benefits continue to accrue even after PPF a/c is transferred to another bank
 When you may have to visit income tax department’s compliance portal

Foreign investors want Sebi to widen
January, 21st 2010

Portfolio investors have suggested to the Securities and Exchange Board of India (Sebi) that the stock lending and borrowing (SLB) facility be extended to even those stocks in which derivatives trading is not yet permitted, in other words, the cash segment. Currently, SLB is allowed only in F&O stocks.

Stock lending and borrowing is a mechanism which allows investors to sell shares which they think are overvalued, without owning those shares. They do so by borrowing the shares for a certain duration by paying an interest charge, and selling them in the market. These investors are betting that they will be able to buy back the shares at a lower rate and return them to the lender at maturity.

If we have SLB extended to non F&O stocks, it would allow an investor to go short. Currently, one cant short a stock which is not in the derivative segment, said the head-derivatives at a
domestic broking firm.

Sebi made SLB operational in April 2008 with a seven-day tenure, but there were few takers for this. The regulator then extended the tenure for SLB to 30 days in November 2008, which meant that investors borrowing shares would have a three-month window to return the shares to the lender. A couple of weeks back, the regulator further extended the tenure to 12 months, in the hope of infusing some interest in the product which has failed to take off so far.

People familiar with the issue told ET that following the regulators recent modification on the SLB framework, select foreign investors have not only expressed their concern on some of the modifications but also discussed with Sebi on what could help make this instrument more successful.

Some of the foreign investors had met with whole-time member Prashant Saran in Hong Kong at a roadshow conducted by Sebi, said an official at a foreign fund on condition of anonymity. It is learnt that these investors had discussions on a whole host of issues, including SLB. Under the latest guidelines, the Approved Intermediary (clearing houses) have been given the flexibility to decide the tenure. The regulator had also said that the lender/borrower would be provided with a facility for early recall /repayment of shares.

However, institutional investors are concerned about the best effort clause in case of an early recall of securities by the lender. There has to be a buy in mechanism which kicks in case of an early recall which is the international best practice. As of now, the AI doesnt have to provide complete support, said an investor. Currently, in case a lender recalls the securities anytime before completion of the contract, the AI on a best effort basis will try to borrow the security for the balance period and pass it onward to the lender.

Portfolio investors are also concerned as to how a borrower will be able to buy back shares from the market (to repay his obligation) in case the FII limit in the stock is already reached.

Home | About Us | Terms and Conditions | Contact Us
Copyright 2018 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Software Development Software Programming Software Engineering Custom Software Development Requirement Based Software Development Software Solutions Software Serv

Transfer Pricing | International Taxation | Business Consulting | Corporate Compliance and Consulting | Assurance and Risk Advisory | Indirect Taxes | Direct Taxes | Transaction Advisory | Regular Compliance and Reporting | Tax Assessments | International Taxation Advisory | Capital Structuring | Withholding tax advisory | Expatriate Tax Reporting | Litigation | Badges | Club Badges | Seals | Military Insignias | Emblems | Family Crest | Software Development India | Software Development Company | SEO Company | Web Application Development | MLM Software | MLM Solutions