The Indian capital markets, considered as one of the most observed markets, are undergoing a tremendous upsurge. Experts and s provide several reasons justifying these movements. When the markets are booming, it becomes all the more important to explore the fundamental reasons that lie behind such performances. In such a scenario, the role of the regulator becomes all the more important. Of late, it has been observed that our capital market regulator, Sebi, has taken several measures to ensure and boost investors' confidence. Such measures have come either through the application of regulations or in extreme cases to penalize the concerned entities who created panic in investors' minds. In consonance to its ongoing effort of increasing liquidity in the market and providing more safety to the investors, Sebi is proposing to allow short selling to institutional investors, which as of now is restricted to individuals.
Back
in the year 1996, the discussion pertaining to short selling was
initiated by Sebi under the leadership of the then Chairman of GIC,
BD Shah. As per the committee, headed by Shah, the term short selling
was defined as "the selling of shares without having the physical
possession of the shares, unless it is either for squaring-up of
an earlier purchase in the same settlement of the same stock exchange
or against the pending deliveries from the same stock exchange pertaining
to previous settlements." As a follow-up action of the recommendations
of the Shah committee, all the member brokers of the stock exchanges
were asked to submit the scrip-wise details of the short selling
position at the end of each trading day with effect from November
29, 1996. This was done primarily to bring transparency in the system. |
