Sebi panel to study short-sales pattern

The sub-group would look into feasibility of nationwide limits for short-sales and long buys for specific scrips and submit its report to the committee in a month’s time, he said. "It would meet market participants including brokers and lenders to elicit views on promoting stock lending in the capital markets," he added.

The study group, which would also be headed by Anjaria, includes members from bourses like Himanshu Kazi from the Bombay Stock Exchange and Rahul Malik of Delhi Stock Exchange and SEBI executive director Pratip Kar.

The group would recommend steps for creating level playingfield for short sellers and long buyers, SEBI chief D R Mehta said.

Brokers pool accounts: The Sebi sub-group, constituted to examine the issues relating to possible misuse of brokers’ pool accounts, on Tuesday decided to introduce a system to ensure that settlement is made directly to the investors’ depository accounts to the maximum extent possible.

The decision, Sebi said, has been taken in the interest of efficiency, liquidity, safety and better receipt of corporate benefits. The clearing corporation/clearing house will ascertain from each clearing member the beneficial account details of the investors who are due to receive pay-outs. Based on this, the CC/CH will send pay-out instructions to the depositories so that investors receive pay-outs of securities directly to the extent of instructions received from the respective clearing members. The Sebi sub-group is headed by Sebi board member Prof JR Varma.

“Only in the case of some problems can shares be credited to brokers’ pool accounts. This will form only a small part of the overall number,” Sebi chairman DR Mehta said after the meeting.

Modalities in regard to this mechanism and penalties for non-performance would be worked out by a group headed by Prof Varma. This group will comprise Prof Varma, Pratip Kar of Sebi, National Securities Depository Ltd (NSDL)’s Mr Gagan Rai, Central Depository’s VV Raut, Raghavan Putran of the National Stock Exchange, Bombay Stock Exchange’s ST Gerela, R Chakrapani of BoI Shareholding and SS Sodhi of the Delhi Stock Exchange.

The group would also consider the manner in which vyaj-badla shares would be treated. Besides, it would also consider ways to reduce balances in the existing pool accounts of the brokers. NSDL would modify its bye-laws so that corporate benefits can be distributed to the pool accounts.

Sebi has also proposed introduction of on-line inter-depository transfer facilities (both for market and off-market transactions) in lieu of the current batch processing method. It was also agreed by the depositories that they would publish their balance sheet and annual accounts on their website as a measure of greater transparency.

On the controversy surrounding a large chunk of ACC shares whose beneficial owners are not being traced, Sebi officials said the shares were most probably in vyaj-badla transactions at BSE and ALBM in NSE. It may be recalled that a section of the market has been expressing serious concern about the fate of shares in brokers’ pool accounts since they can be prone to misuse by brokers.