The Hindu Business Line : SEBI has no plans to stop short selling: Bhave

“One of the things SEBI has found is that FIIs were purchasing as well as selling so it is not as if they were only sellers. But on a net basis, they are sellers.”

Shashi Ashiwal

Market play: Mr C.B. Bhave, Chairman, Securities and Exchange Board of India, and Ms Zarinah Anwar, Chairperson, Securities Commission Malaysia, at the ‘India-Malaysia Capital Market Forum 2008’ in Mumbai on Thursday. Mr Bhave ruled out stopping short-selling and said, “We don’t really have evidence that short-sellers are driving the market down.

Our Bureau

Mumbai, Nov. 20 Capital markets regulator the Securities and Exchange Board of India has no intention to stop short selling in India, as there is no evidence that short-selling is driving the equity markets down, said the SEBI Chairman, Mr C.B. Bhave.

Although many markets in the West had banned short-selling, their markets had continued to decline further.

“Their (financial) institutions failed one after another. Some of them have re-started short-selling in their markets,” Mr Bhave said on the sidelines of an India-Malaysia Capital Markets conference here.

“We don’t really have evidence that short-sellers are driving the market down,” he said.

Commenting on foreign institutional investors (FIIs), Mr Bhave said “The regulator has not found any FIIs having lent shares off-shore after we conveyed our regulatory disapproval to them on the issue.”

“We are trying to look at what is happening to FIIs and why they are sellers on a net basis,” Mr Bhave said.

One of the things SEBI has found is that FIIs were purchasing as well as selling so it is not as if they were only sellers, he said. “But on a net basis, they are sellers. So probably, long-term funds are buying into Indian market as well,” the SEBI Chairman said.

Cross-listing

He said India and Malaysia could work together in the area of cross listing; Malaysian companies may seek to raise capital in India and vice versa and that way provide investors access to companies in both the countries.

“This will help diversify our sources of capital which so far has been coming from the developed world, now that the developing world is coming to its own,” said the SEBI Chairman.