No move to ban short selling, says Bhave

The Securities and Exchange Board of India (Sebi) chairman, C B Bhave, on Tuesday said that the regulator had no intention of imposing a ban on short selling. Bhave was speaking to a news channel from New York, where he is attending the India Investment Forum.

Bhave said regulations on short selling in India were adequate and foreign institutional investors’ (FIIs’) withdrawal from the country was mainly due to global conditions.

“The recent ban on short selling (in the US and other countries) is a short-term measure, taken in response to an emergency situation. So, my instinct would be not to read too much into it. But when long-tem changes are brought about in these markets, it will be worthwhile for us to study what was the rationale behind it. But I would not want to react too soon to the matter,” he said.

Last week, a top Sebi official had told Business Standard that they were closely watching the trends in the domestic stock market after the regulators in the US, UK and Australia banned short selling of financial stocks.

Hedge funds, known for their short selling practices, have been under scanner after $3 trillion was wiped out from equities this week as financial shares crashed.