Date:29/01/2008 URL: http://www.thehindubusinessline.com/2008/01/29/stories/2008012952091600.htm

Back SEBI firm on short-selling

Signs pact with Pakistan regulator to enhance ties

Ramesh Sharma

Mr M. Damodaran, Chairman, SEBI, with Mr Razi-Ur-Rahman, Chairman, Securities and Exchange Commission of Pakistan, before signing an MoU, in the Capital on Monday. —

Our Bureau

New Delhi, Jan. 28 Institutional investors including foreign institutional investors (FIIs) and their sub-accounts can undertake short-selling, lending and borrowing of securities from February 1 provided the stock exchanges are ready with the requisite systems, the SEBI Chairman, Mr M. Damodaran, said here today.

“From SEBI’s side everything has been done. The RBI has also cleared it. It is for the stock exchanges to provide the systems. If they are ready, it will start on February 1. Even otherwise, it would get started within the next few days,” Mr Damodaran told presspersons when asked whether SEBI plans to review its earlier decision on allowing short-selling in the wake of recent volatility in the stock markets.

He noted that the Securities and Exchange Board of India (SEBI) sticks to its decision on allowing short-selling of securities by institutional investors from February 1.

Short selling is proposed to be allowed for all institutional investors, both FIIs and domestic institutions. Retail investors are already allowed to undertake short-selling of securities.

Meanwhile, SEBI on Monday signed a bilateral memorandum of understanding (MOU) with Securities and Exchange Commission of Pakistan (SECP) to enhance mutual cooperation and assistance between the two regulatory bodies. The MoU was signed by Mr Damodaran on behalf of SEBI and Mr Razi-ur-Rahman Khan, Chairman, SECP, on the eve of the second annual meeting of the South Asian Securities Regulators’ Forum being held in New Delhi on Tuesday.