Description

BSE announces market-wide position limits, client-level position limits, and institutional investor position limits for stocks traded under Securities Lending and Borrowing Scheme (SLBS) for January 2026.

Summary

BSE has announced the market-wide position limits (MWPL) for stocks traded under the Securities Lending and Borrowing Scheme (SLBS) for January 2026. The circular specifies position limits at three levels: market-wide position limits, client-level position limits (10% of MWPL), and position limits for clearing members and institutional investors (1% of MWPL). The list covers 52 securities including various ETFs and equity shares.

Key Points

  • Market-wide position limits updated for 52 securities eligible for SLBS trading
  • Client-level position limit set at 10% of the market-wide position limit
  • Clearing member and institutional investor position limit set at 1% of MWPL
  • Includes major ETFs like ALPHAETF (17,972,261 shares MWPL), LIQUIDCASE (46,994,510 shares MWPL), and SBFC Finance Ltd (51,329,949 shares MWPL)
  • Covers diverse securities including sectoral ETFs, equity shares, and thematic funds
  • Position limits specified in number of shares for each underlying scrip

Regulatory Changes

No new regulatory framework introduced. This is a monthly update of position limits as per existing SLBS regulations to manage risk and prevent excessive concentration in securities lending transactions.

Compliance Requirements

  • Market participants must adhere to the specified position limits while trading under SLBS
  • Clients cannot exceed 10% of the market-wide position limit for any security
  • Clearing members and institutional investors must stay within 1% of MWPL
  • Monitoring and compliance required for all SLBS transactions in the listed securities
  • Participants should update their risk management systems with the new limits

Important Dates

  • Effective Period: January 2026
  • Circular Date: December 31, 2025

Impact Assessment

Market Impact: Medium - affects liquidity and trading strategies for participants in securities lending market. Updated limits may require position adjustments for participants near previous thresholds.

Operational Impact: Participants need to monitor positions against new limits, particularly for securities with significant limit changes. ETFs with large position limits (LIQUIDCASE, SBFC Finance, TVS Supply Chain) offer more flexibility for institutional participation.

Risk Management: Position limits serve as risk mitigation tool to prevent excessive concentration and ensure orderly settlement in the securities lending framework.

Impact Justification

Updates position limits for SLBS participants for January 2026, affecting trading and risk management for institutional investors, clearing members, and clients in securities lending operations.