SEBI to review short selling, SLB frameworks: Pandey

SEBI Chairman Tuhin Kanta Pandey (file photo)
| Photo Credit:
PTI/SHASHANK PARADE

SEBI will establish a working group to conduct a comprehensive review of short selling regulations and the Securities Lending and Borrowing (SLB) framework, Chairman Tuhin Kanta Pandey announced on Friday. This initiative aims to update market mechanisms that have seen minimal changes since their introduction in 2007 and 2008 respectively.

Speaking at the CNBC-TV18 Global Leadership Summit, Pandey emphasized the regulatory body’s commitment to modernizing these systems. The SLB mechanism allows demat account holders to lend securities to other market participants through exchange platforms, with clearing corporations ensuring transaction security.

Industry experts note this framework supports short selling activities and helps prevent settlement failures while creating additional revenue streams for investors. The upcoming review aligns with SEBI’s ongoing evaluations of stockbroker regulations and mutual fund guidelines.

Regarding foreign portfolio investments, Pandey reassured markets about sustained global confidence in India’s economic trajectory despite recent outflows. He highlighted that foreign investors maintain substantial holdings totaling approximately USD 900 billion in Indian markets.

The Chairman noted increased market resilience through growing domestic participation, with individual investors now owning about 18% of listed companies alongside strong institutional backing. He described foreign and domestic investments as complementary forces in market dynamics.

When questioned about potential restrictions on weekly derivatives expiries, Pandey maintained that current systems continue functioning effectively. He reiterated SEBI’s data-driven regulatory approach focused on addressing market inefficiencies through measured, consultative processes.

Published on November 7, 2025