Sebi allows ‘liquid’ index ETFs to trade in short-selling market
Indian financial markets regulator the Securities and Exchange Board of India (Sebi) has allowed exchange-traded funds (ETFs) that track indices to trade in the short selling market.
Sebi said in statement: "Liquid Index ETFs shall be eligible for trading in the Securities Lending and Borrowing (SLB) segment."
According to Sebi, an index ETF is considered liquid, if it has traded on at least 80 per cent of the days over the past six months, while the fund’s impact cost over the past six months must be less than or equal to one per cent.
"Positions limits for SLB in respect of ETFs shall be based on the assets under management of the respective ETF," says the Sebi statement.
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