Description

NSE updates position limits for securities lending and borrowing scheme, specifying market-wide, participant, institutional and non-institutional client limits for eligible securities.

Summary

NSE has issued revised position limits for securities eligible under the Securities Lending and Borrowing Scheme (SLBS). The circular specifies four types of limits: Market Wide Position Limit (MWPL), Participant limit (10% of MWPL), Institutional Client Limit (10% of MWPL), and Non-Institutional Client Limit (1% of MWPL) for each security. The annexure contains detailed limits for 68+ securities ranging from large-cap stocks like ADANIPOWER (MWPL: 482,906,787 shares) to smaller securities like ASTRAZEN (MWPL: 625,000 shares).

Key Points

  • Market Wide Position Limits (MWPL) updated for eligible SLBS securities
  • Participant limit set at 10% of MWPL for each security
  • Institutional Client limit set at 10% of MWPL
  • Non-Institutional Client limit set at 1% of MWPL
  • Limits apply to both securities and ETFs participating in SLBS
  • Contains detailed position limits for 68+ securities across various sectors

Regulatory Changes

The circular revises the applicable position limits framework for Securities Lending and Borrowing Scheme participants. The hierarchical limit structure ensures:

  • Market-wide exposure caps to manage systemic risk
  • Individual participant limits to prevent concentration
  • Differentiated limits for institutional vs non-institutional clients based on their risk profiles
  • Proportionate allocation ensuring non-institutional clients have stricter limits (1% vs 10%)

Compliance Requirements

  • All SLBS participants must adhere to the revised position limits specified in Annexure 1
  • Participants must ensure their positions in eligible securities do not exceed the prescribed participant limit
  • Institutional clients must monitor positions against the institutional client limit
  • Non-institutional clients must comply with the more conservative 1% limit
  • Market infrastructure institutions must enforce these limits in their risk management systems

Important Dates

  • Circular issued: November 28, 2025
  • Effective date: Not explicitly specified in the provided content

Impact Assessment

The revised limits will impact SLBS participants’ ability to take positions in eligible securities. Securities with higher MWPL like ADANIPOWER (482.9 million shares), ALOKINDS (124.1 million shares), and AWL (46.4 million shares) offer greater capacity for lending and borrowing activities. Conversely, securities with lower limits like ASTRAZEN (625,000 shares) and ARMANFIN (819,867 shares) will have restricted capacity. The tiered limit structure ensures retail/non-institutional participants maintain smaller positions relative to institutional participants, promoting market stability and risk management in securities lending operations.

Impact Justification

Updates position limits for SLBS participants across multiple securities, affecting trading and risk management for market participants engaged in securities lending and borrowing activities