India’s Stock Market Regulator To Seek Short Selling Details From Investors

January 10, 2024 01:52 AM

MUMBAI- India's market regulator said on Friday that institutional investors will have to disclose upfront whether a transaction in Indian securities involves short selling, while retail investors will have to do so by the end of the day when a trade is made.

Securities and Exchange Board of India (SEBI) said in a circular on its website that the information would be made public by stock exchanges. 

So-called short selling when an investor sells a stock which it does not own at the time of trade in anticipation of the price falling and being able to buy it more cheaply later.

The move comes after the Indian Supreme Court asked the regulator to examine whether investors suffered losses and whether any short-positions were created in breach of the law ahead of a Hindenburg Research report last year which alleged that India's Adani Group had broken stock market rules.

These allegations are being investigated by SEBI. The Adani Group has denied any wrongdoing.

Existing Indian rules do not allow so-called naked short trades, where an investor sells short without having already borrowed or located the shares or securities to be sold.

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