BSE Clearing launches three-day contracts for securities lending and borrowing

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The clearing corporation of BSE, ‘BSE Clearing Limited' on Monday launched three‑working‑day contracts in the Securities Lending & Borrowing segment to provide greater flexibility for short‑term securities borrowings and delivery requirements.

The statement from BSE Clearing Limited said the shorter tenor can also facilitate inter-exchange arbitrage and greater price alignment across trading venues, enabling participants to respond more efficiently to temporary market opportunities, as per IANS.

The three working day contract introduced by BSE focuses on building flexibility provided under SEBI's SLB framework for introducing contracts of different tenures based on the evolving needs of market participants.

The statement from the BSE highlights that the contracts will feature a T+1 first leg and a T+3 reverse leg, excluding settlement holidays, and will initially be available for securities in the Futures and Options (F&O) segment under the "D" series prefix, as per IANS.

The shorter-tenor contracts provided market participants with an additional avenue for short-term securities borrowing and lending through the BSE SLB platform.

As per BSE's official statement, the SLB platform will also continue to operate through an automated, screen-based order matching mechanism based on price-time priority.

No foreclosure during AGM or EGM

There will be no foreclosure in the event of an AGM (Annual General Meeting) or EGM (Extraordinary General Meeting), and the contracts will not have a facility for Repay, Recall or Rollover.

Vaisshali Babu, MD and CEO, BSE Clearing Limited further stated, "The introduction of shorter-tenor SLB contracts is an important step towards making the securities lending ecosystem more responsive to the evolving needs of market participants," as cited by IANS.

By providing greater flexibility in contract tenures, the facility will support short-term securities requirements, facilitate greater price alignment, and further deepen participation in the SLB market, she added.

Moreover, NSE Clearing Limited had earlier announced the introduction of shorter-tenure contracts under the Securities Lending and Borrowing (SLB) Scheme from August 17.

Stock markets fall as crude prices rise amid West Asia geopolitical tensions

Earlier during the morning trade on Monday, benchmark indices Sensex and Nifty opened in the red, weighed down by rising crude oil prices and continued geopolitical tensions in West Asia. Investors remained cautious as higher energy prices raised concerns over inflation and market sentiment.

The 30-share BSE Sensex declined 284.85 points to 77,717.05 during initial trading. The 50-share NSE Nifty fell 69.25 points to 24,297.05.

(With inputs from IANS)