Review of Securities Lending and Borrowing (SLB) Framework
Summary
This circular partially modifies the Securities and Lending and Borrowing framework by redefining dividend handling procedures. It mandates that dividends be calculated, recovered from borrowers, and passed to lenders on the record date. The document instructs stock exchanges to amend bye-laws and report implementation status while affirming the continued applicability of prior regulations.
Text
In partial modification to SEBI circular MRD/DoP/SE/Cir-31/ 2008 dated October 31, 2008, para 2 (a) shall read as under –
The dividend amount would be worked out and recovered from the borrower on the book closure/ record date and passed on to the lender.
The other provisions, as specified in SEBI circular no. MRD/DoP/SE/Dep/Cir-14/2007 dated December 20, 2007 on “Short selling and securities lending and borrowing”, SEBI circular no. MRD/DoP/SE/Cir- 31/2008 dated October 31, 2008 on “Review of Securities Lending and Borrowing (SLB) Framework” and SEBI circular no SEBI/MRD/DoP/SE/Dep/Cir-01/2010 dated January 06, 2010 on “Review of Securities Lending and Borrowing (SLB) Framework” shall continue to be applicable.
make necessary amendments to the relevant bye-laws, rules and regulations for the implementation of the above decision.
bring the provisions of this circular to the notice of the member brokers/clearing members of the Exchange and also to disseminate the same on the website.
communicate to SEBI, the status of the implementation of this circular in the Monthly Development Report.
This circular is being issued in exercise of powers conferred under Section 11 (1) of the Securities and Exchange Board of India Act, 1992 to protect the interests of investors in securities and to promote the development of, and to regulate the securities market.
Source: SecMarx — Review of Securities Lending and Borrowing (SLB) Framework. Verbatim text is public record; SecMarx structuring (linkage to applying orders) is cited to us.