operation of short selling of securities

Last updated: 27 March 2008

MRD/DoP/SE/Cir- 05 /2008

March 19, 2008

The Executive Directors/Managing Directors/Administrators
of all Stock Exchanges
Managing Director & CEO, NSDL
Managing Director & CEO, CDSL

Dear Sir / Madam,

Sub:- Operationalisation of Short Selling and Securities Lending and Borrowing

SEBI vide circular dated December 20, 2007 had specified the broad framework for short selling by institutional investors and a full-fledged securities lending and borrowing scheme for all market participants.

It has been decided to operationalise the above with effect from Monday, April 21, 2008.

The Stock Exchanges and the Depositories are advised to :

3.1 make necessary amendments to the relevant bye-laws, rules and regulations for the implementation of the above decision.

3.2 bring the provisions of this circular to the notice of the member brokers/clearing members, depository participants and also disseminate the same on their website.

3.3 communicate to SEBI, the status of the implementation of the provisions of this circular in the Monthly Development Report.

This circular is being issued in exercise of powers conferred under Section 11 (1) of the Securities and Exchange Board of India Act, 1992 and Section 19 of the Depositories Act, 1996, to protect the interests of investors in securities and to promote the development of, and to regulate the securities market.