SEBI restricts naked short selling, no day trading for institutional investor

The Securities and Exchange Board of India stated that naked short selling will not be permitted, however, investors among all categories will be allowed for short selling and also futures and option trades. Investors would be necessarily honour their job of delivering securities at time of settlement, said SEBI.
No institutional investor would be allowed for intra-day trading or settle their transactions, said SEBI on short selling and borrowing scheme. Short selling refers to selling of stock that is not owned by the seller at the time of trade.

Market Regulator may review list of eligible stocks for short selling regularly, said SEBI as to tightened disclosure rules for short selling. "The stock exchanges  shall  frame  necessary  uniform  deterrent provisions and take appropriate action against the brokers for failure to deliver securities at the time of settlement which shall act as a sufficient deterrent against failure to deliver," said SEBI.

SEBI quoted that the introduction of a full-fledged securities lending & borrowing scheme[SLBM] shall be simultaneous with the introduction of short-selling by institutional investors.

"The brokers shall be mandated to collect the details on scrip-wise short sell positions, collate the data and upload it to the stock exchanges before the commencement of trading on the following trading day. The stock exchanges shall then consolidate such information and disseminate the same on their websites for the information of the public on a weekly basis. The frequency of such disclosure may be reviewed from time to time with the approval of SEBI," said the market regulator.

Institutional investors now have to confirm and share about the trade is short sale or not, retail investors have the authority to take necessary disclosures by the end of trading hours. Brokers are directed to collect short sell positions and upload on exchanges before next trading day.