Regulations on Securities Lending & Borrowing (SLB) India

SLB ( Lend Your Shares )

Regulations on Securities Lending & Borrowing (SLB)

SEBI has allowed all categories of investors including retail and institutional to borrow as well as lend securities. Since some entities are regulated jointly with other regulators their specific regulations are mentioned as under:

Foreign Portfolio Investor / Foreign Institutional Investor

Lending allowed subject to FDI policy

Lending not permitted for shares in ban list /caution list of RBI.

Borrowing allowed only for delivery into short sale

Margins to be paid only in the form of cash.

Custodian to report short selling, lending & borrowing on a daily basis.

Mutual Funds

Offer Document to disclose the intention to lend securities, exposure limit for the scheme as well as intermediary and market risk.

AMC’s to report to trustees on a quarterly basis about the level of lending in terms of value, volume and intermediaries; earnings/losses, and other details as may be required.

Insurance Companies:

Lending allowed to the extent of 10% of the quantity in the respective scripts in the respective fund. These limits must be adhered at all times.

Securities lent in SLB not to be treated as creating encumbrance, charge, hypothecation or lien on such securities.

Lending fees to be accounted on accrual basis.

Lending allowed only after approval from investment committee.

Attention Investors

Stock Brokers can accept securities as margin from clients only by way of pledge in the depository system w.e.f. September 1, 2020. Update your mobile number & email Id with your stock broker/depository participant and receive OTP directly from depository on your email id and/or mobile number to create pledge.

Risk Disclosure on Derivatives | Smart ODR | Mandatory Display | KYC Validation Links

BSE / NSE SEBI Registration No. INZ000279232, Depository Participant SEBI Registration No. – IN DP CDSL 132-2015

Mutual funds - ARN No. 81648 , Investment Adviser SEBI Registration No. : INA000008668.

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Download Client Registration Documents

Download Client Registration Documents (Rights & Obligations, Risk Disclosure Document, Do's & Don't's) in Vernacular Language :

Assamese Bengali Gujarati Hindi Kanada

Kashmiri Konkani Malyalam Marathi Oriya

Punjabi Sindhi Tamil Telegu Urdu

NOTE : " This document is a translated version of the client registration documents in English and is being provided in vernacular language to facilitate better understanding by the investors. In case of any ambiguity, the contents of the English version would prevail. "

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Risk Disclosures On Derivatives

9 out of 10 individual traders in equity Futures and Options Segment, incurred net losses.
On an average, loss makers registered net trading loss close to ₹ 50,000.
Over and above the net trading losses incurred, loss makers expended an additional 28% of net trading losses as transaction costs.
Those making net trading profits, incurred between 15% to 50% of such profits as transaction cost.

Source:

1. SEBI study dated January 25, 2023 on “Analysis of Profit and Loss of Individual Traders dealing in equity Futures and Options (F&O) segment”, wherein Aggregate Level findings are based on annual Profit/Loss incurred by individual traders in equity F&O during FY 2021-22

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