Description

NSE updates market-wide position limits (MWPL) and participant limits for securities and ETFs in the Securities Lending and Borrowing Scheme (SLBS).

Summary

NSE has revised the Market Wide Position Limits (MWPL) and corresponding participant limits, institutional client limits, and non-institutional client limits for securities and ETFs under the Securities Lending and Borrowing Scheme (SLBS). The circular provides updated limits for multiple securities through an Excel annexure containing detailed position limit data.

Key Points

  • Revised MWPL announced for securities and ETFs eligible under SLBS
  • Four-tier limit structure: Market Wide Position Limit, Participant Limit (10% of MWPL), Institutional Client Limit (10% of MWPL), and Non-Institutional Client Limit (1% of MWPL)
  • Limits apply to both equity securities and ETFs including ABSLBANETF, ABSLLIQUID, ABSLNN50ET, ABSLPSE, ALPHAETF, ALPL30IETF
  • Notable high MWPL securities include ADANIPOWER (482.9 million shares), ALOKINDS (124.1 million shares), ABCAPITAL (82.2 million shares)
  • Limits provided for over 68 securities in the annexure

Regulatory Changes

This circular updates the position limits framework for SLBS operations. The revised limits reflect current market capitalization, free float, and liquidity conditions of the eligible securities. The hierarchical limit structure ensures risk management at multiple levels - exchange-wide, participant-level, and client-level.

Compliance Requirements

  • SLBS participants must adhere to the revised participant limits (10% of MWPL) for each security
  • Institutional clients are subject to limits of 10% of MWPL per security
  • Non-institutional clients face stricter limits of 1% of MWPL per security
  • Participants must monitor and ensure their positions and client positions remain within prescribed limits
  • Trading members must implement appropriate risk management systems to track these limits

Important Dates

  • Circular Issue Date: January 30, 2026
  • Effective Date: Immediate (limits applicable from date of circular)

Impact Assessment

The revised limits will impact SLBS participants’ ability to take positions in securities lending and borrowing. Securities with increased limits may see enhanced liquidity in the SLBS segment, while those with reduced limits may experience constrained activity. The large MWPL for high-liquidity stocks like ADANIPOWER (482.9M shares) and ALOKINDS (124.1M shares) indicates robust lending-borrowing capacity. ETF limits will affect institutional strategies involving basket securities lending. Market participants need to adjust their position management systems and strategies to align with the new limits to ensure continued compliance.

Impact Justification

Operational circular updating position limits for SLBS participants across multiple securities and ETFs, affecting trading and lending operations but not introducing new rules.