Economy Current Affairs - 2020

Liquid Index ETFs shall be eligible for trading in the SLB segment: SEBI

As part of changes in the securities lending and borrowing framework, SEBI has permitted ETFs (Exchange Traded Funds) that track indices to trade in the short selling market. Liquid Index ETFs shall be eligible for trading in the Securities Lending and Borrowing (SLB) segment.

SEBI has also said that an Index ETF would be considered ‘liquid’, if:

  • The Index ETF has traded on at least 80% of the days over the past 6 months.
  • Index ETF’s impact cost over the past 6 months is less than or equal to 1%.

SEBI has also introduced roll-over facility for lenders and borrowers in the SLB segment

This concerns with the short selling in the market. In general, short selling pertains to selling of a stock that is not owned by the seller at the trading time. The short selling can be done by retail and institutional investors.

As per SEBI, any lender or borrower who wants to extend an existing lent or borrow position shall be permitted to roll-over such positions. Thus, now a lender who is due to receive securities in the pay out of an SLB session can extend the period of lending. Likewise, a borrower can extend the period of borrowing.

  • The roll-over shall be conducted as part of the SLB session.
  • Rollover would not be permitted for netting of counter positions.
  • Rollover shall be available for a period of three months i.e. the original contract plus two rollover contracts.

Sebi has asked stock exchanges to take necessary steps for implementing the circular.

Hind Copper disinvestment rescued by LIC and PSU banks

In the direction of achieving Rs 30,000 crore target for fiscal 2012-13 by disinvesting PSUs, the government of India managed to yield Rs 800 crore by selling shares of Hindustan Copper. The sail was mainly on support from the Life Insurance Corporation and public sector banks. The offer for sale (OFS) saw lukewarm response from large foreign institutional investors and private domestic investors like mutual funds.