SEBI imposes fresh curbs to arrest downslide in markets

Even as the Sensex bounced back by nearly 200 points to close steady, the Securities and Exchange Board of India (SEBI) has tightened the trading norms to arrest the market slide. It has made it mandatory that all outstanding sales positions should result in delivery at the end of a trading day with effect from June 17. With respect to carry-forward business, 50% of all outstanding short sales positions at end of Tuesday, will be squared up in the current settlement with the balance being squared up in the following settlement. It is learnt that the regulator even considered banning short sales but decided to implement the next best alternative that is ensuring that the short sale positions are squared off by the end of the day itself or lead to delivery at the end of the day. The measures which are temporary will not affect trades of domestic or foreigninstitutions as they trade on delivery basis only, said a SEBI statement issued on Tuesday. The regulator has clarified that the measures will not be applicable for securities which are in the no-delivery period. However, net sales transactions in these securities will attract a daily margin of 50% of the net outstanding position in the settlement in which securities are in "no-delivery". All outstanding net sale position at the end of the no-delivery period must result in delivery. SEBI has allowed squaring up of net outstanding purchase position. The stock exchanges have been advised to keep a close watch on outstanding positions and levy appropriate special margins in addition to the normal margins.