The stock exchanges on Monday clarified that the Securities and Exchange Board of India (SEBI) was not considering any proposal regarding a ban on short selling to curb the ongoing volatility and equity sell-off.
The spokespersons for BSE and the National Stock Exchange (NSE) said ‘there is no proposal on ban on short selling with SEBI’, after a media report suggested that the capital markets regulator was considering such a ban among other measures.
Regulators in a few countries like Spain, South Korea and Italy have banned short selling amid huge volatility and a fall in stock prices.
Traders’ bet
Short selling refers to a strategy by which traders bet on a decline in prices and try to profit at a time when the markets are falling.
Indian indices have fallen more than 25% from their record highs reached in January.
In market parlance, a fall of over 20% is looked upon as a sign of the markets entering a bear market.
