SEBI to make short-selling of stocks hard due to Corona
To begin with, on March 20th, SEBI declared measures to make short-selling tough to counter the market volatility affected by the virus outbreak. So then, the measures would come into practice from March 23rd, 2020.
Besides, as part of the measures, SEBI said to raise margin for the non-F&O stocks to 40% in a phased manner. Also, the margins would only remain applied in the cash market. And may stand applicable for one month.
However, the market-wide position limit on F&O stocks may remain cut to 50%. It also stated that the dynamic price bands for F&O stocks may remain flexible. But only after a cooling-off period of 15 minutes from the time of the meeting.
Also, SEBI stated that it would revise Market Wide Position Limit (MWPL) for stocks in the F&O segment to 50% of existing levels. However, the average daily price high-low variation percentage stands more than or equal to 15%.
Besides, the revised MWPL would remain only for introducing the ban period on fresh positions. But not for determining the enhanced eligibility criteria for derivative stocks.
Furthermore, the stock exchanges shall check on an intraday basis. Also, the current penalty structure adopted by the stock exchanges might remain enhanced to 10-times of the minimum. And 5-times of the maximum penalties specified by the stock exchanges.