The regulator’s recent circular gave institutions permission to short stocks and proposed a borrowing & lending scheme to facilitate this. But requiring institutions to disclose their short trades upfront will leave them vulnerable to short squeezes.
Sebi, which has been investigating allegations against the Adani Group by Hindenburg Research, recently tightened its rules around short selling. Mint explains what short selling entails, its pros and cons, and Sebi’s latest tweaks.