SEBI proposes SLB reforms to boost cash market liquidity by simplifying rules and cutting costs.

SEBI is seeking input on reforms to simplify India’s Securities Lending and Borrowing (SLB) framework to boost cash market liquidity and participation. The initiative, led by whole-time member Ananth Narayan, aims to make SLB more accessible by streamlining processes, improving transparency, and addressing inefficiencies like high costs and limited stock availability. Currently, most short selling occurs in the futures market due to SLB’s complexity and operational hurdles. Reforms may include removing the T2T mechanism, enabling intra-day square-up, and enhancing exchange interoperability to align with global standards while managing risks.