Presently short
sale is not allowed between CSGL account holder (custodian) and its gilt
account holder (GAH). It has now been decided as under:
i.
A
custodian may undertake a short sale transaction with its GAH within the
permissible short sale limits
ii.
A
custodian may put through a cover transaction with a GAH to square a short sale
transaction in the related security undertaken with a market participant other
than its GAH/s.
The
custodians will have to tag the deal as short sale or cover while reporting the
same to NDS-OM. This will be reckoned in the computation of the short sale
limit utilization.
At the time of
settlement at RBI, custodians will have to ensure adequate balance in their SGL
failing which it will be treated as a SGL bounce with consequent penalties.
Based on RBI
Circular dt 29/10/15. Please visit www.rbi.org.in for any further clarification
if required…..Poppy
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