Revised Applicable MWPL, Participant, Institutional Client and Non-Institutional Client Limits for Securities and ETFs - SLBS

Description

NSE Clearing updates Market Wide Position Limits (MWPL) and position limits for Participants, Institutional Clients, and Non-Institutional Clients in the Securities Lending and Borrowing Scheme for January 2026.

Summary

NSE Clearing Limited has issued revised Market Wide Position Limits (MWPL) and position limits applicable to Participants, Institutional Clients, and Non-Institutional Clients for the Securities Lending and Borrowing Scheme (SLBS) for the month of January 2026. This circular updates the position limits for various securities and ETFs as detailed in Annexure I, pursuant to NCL Circular No. 037/2025 dated April 30, 2025.

Key Points

• Circular Reference: NCL/CMPT/72105, Circular No. 146/2025
• Effective Period: January 2026
• Applies to all Participants and Custodians in the Securities Lending and Borrowing Scheme
• Position limits specified at four levels: Market Wide, Participant, Institutional Client, and Non-Institutional Client
• Participant limit is 10% of MWPL
• Institutional Client limit is 10% of MWPL
• Non-Institutional Client limit is 1% of MWPL
• Covers 51+ securities and ETFs including major stocks and sector ETFs

Regulatory Changes

This is a routine monthly update of position limits for the SLBS segment. The limits are recalculated based on prevailing market conditions and free-float availability. The framework follows the structure established in NCL Circular No. 037/2025 dated April 30, 2025.

Compliance Requirements

• All Participants and Custodians must adhere to the revised position limits effective for January 2026
• Participants must ensure their positions and client positions do not exceed the specified limits
• Institutional clients are subject to a limit of 10% of MWPL per security
• Non-institutional clients are subject to a limit of 1% of MWPL per security
• Market-wide positions across all participants cannot exceed the specified MWPL for each security

Important Dates

• Circular Issue Date: December 31, 2025
• Effective Period: January 2026 (month-long applicability)

Impact Assessment

This circular has moderate operational impact on participants engaged in securities lending and borrowing activities. The revised limits will affect trading strategies and position management for:

• Market participants utilizing SLBS for hedging or arbitrage
• Institutional investors with large borrowing requirements
• Custodians managing SLBS positions for multiple clients

Notable high MWPL securities include ADANIPOWER (482.9 million shares), ALOKINDS (124.1 million shares), and ABCAPITAL (81.8 million shares), indicating higher liquidity and borrowing capacity. Conversely, securities like ABSLLIQUID (46,388 shares) and ABBOTINDIA (531,525 shares) have significantly lower limits, restricting borrowing activity.

Participants need to review their existing positions and adjust them if necessary to comply with the new limits before or during January 2026.

Impact Justification

Regular monthly update of position limits for Securities Lending and Borrowing Scheme affecting multiple securities and ETFs; important for participants engaged in SLBS activities but routine in nature.