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SEBI to review short selling and SBL framework
15 June 2026 India
Image: Olena/stock.adobe.com
The Securities and Exchange Board of India (SEBI) has brought securities lending and borrowing, and short selling, frameworks under review, to facilitate inter-linkage between cash and derivatives markets, as well as to enhance liquidity.
According to SEBI Chairman Shri Tuhin Kanta Pandey, deepening the cash market is a priority for the Board.
During the opening of his speech at the ET Now Market Summit, Pandey said: “We meet at a time when global markets are being tested by geopolitical tension, energy shocks, supply chain fragmentation, and AI-centric technological disruptions.
“In such a world, volatility cannot be wished away. It must be managed. The real test is whether our markets can absorb shocks, protect investors, and continue to support capital formation.”
The derivatives market requires more development, he noted, and that the development of longer-term futures and options contracts in equity derivatives will be an important part of deepening the capital markets.
In commodity derivatives, proposals by SEBI on extending early pay-in benefits to options contracts, phased shift from cash settlement to physical settlement in select agri-commodity contracts, and review of position limits are aimed at deepening participation and strengthening risk management.
SEBI is also reviewing the Innovators Growth Platform so sectors such as AI, semiconductors, clean energy, bio-tech, advanced materials, and defense-tech can access markets better for long-term capital.
In debt markets, the Board is working on the market-making framework for corporate bonds, deepening of the municipal bond market, and tokenisation of corporate bonds.
Pandey concluded: “Markets will continue to be tested. Our response must be to build markets that are deep, transparent, well-governed, and trusted. For investors, my message is simple: invest with a plan, understand your risk, diversify, and stay disciplined.”
According to SEBI Chairman Shri Tuhin Kanta Pandey, deepening the cash market is a priority for the Board.
During the opening of his speech at the ET Now Market Summit, Pandey said: “We meet at a time when global markets are being tested by geopolitical tension, energy shocks, supply chain fragmentation, and AI-centric technological disruptions.
“In such a world, volatility cannot be wished away. It must be managed. The real test is whether our markets can absorb shocks, protect investors, and continue to support capital formation.”
The derivatives market requires more development, he noted, and that the development of longer-term futures and options contracts in equity derivatives will be an important part of deepening the capital markets.
In commodity derivatives, proposals by SEBI on extending early pay-in benefits to options contracts, phased shift from cash settlement to physical settlement in select agri-commodity contracts, and review of position limits are aimed at deepening participation and strengthening risk management.
SEBI is also reviewing the Innovators Growth Platform so sectors such as AI, semiconductors, clean energy, bio-tech, advanced materials, and defense-tech can access markets better for long-term capital.
In debt markets, the Board is working on the market-making framework for corporate bonds, deepening of the municipal bond market, and tokenisation of corporate bonds.
Pandey concluded: “Markets will continue to be tested. Our response must be to build markets that are deep, transparent, well-governed, and trusted. For investors, my message is simple: invest with a plan, understand your risk, diversify, and stay disciplined.”
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