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SECURITIES AND EXCHANGE BOARD OF INDIA
SECONDARY MARKET DEPARTMENT
Mittal Court, B Wing, First Floor,
224, Nariman Point, Mumbai 400 021

SMDRP/Policy/Cir- 20/2001

March 16, 2001

The Executive Director/ President/Managing Director of all the Stock Exchanges

Sir/Madam,

It was decided in the meeting of the Group on Risk Management Systems for Equity Market held on March 07, 2001 that all sales transactions effective from March 08, 2001 shall be backed by delivery unless a sale transaction is preceded by a purchase position of at least an equivalent amount in the name of the same client in the same or any other exchange. This would also apply to the proprietary trading by members. This would be on self-certification basis and would be subject to Exchange off-site inspection upto sub-broker and client level. The exchanges would share information to facilitate the verification. It would be applicable to scrips in the MCFS, ALBM, BLESS and other deferral products. This was communicated vide circular no. SMDRP/Policy/Cir-13/2001 dated March 7, 2001.

This decision was to be reviewed after two settlements. After discussions with some of the stock exchanges and taking into consideration the present market condition, it has been decided that these restrictions on the sale transactions would continue to apply until further notice.

Yours faithfully,

P.K.BINDLISH
Deputy General Manager
Secondary Market Depository,
Research & Publications Department
e-mail: pkb@sebi.gov.in

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