**Summary:**
This circular, issued by the Securities and Exchange Board of India (SEBI) on March 27, 2023, announces amendments to the Securities Lending Scheme, 1997. The primary change eliminates the option of payment via Demand Draft for fees, penalties, and recoveries, mandating digital payment methods exclusively.
Effective April 1, 2023, approved intermediaries are required to remit payments through direct credit to SEBI's bank account via NEFT/RTGS/IMPS, online payment using the SEBI payment gateway, or any other mode specified by SEBI. Upon realization of payment through these methods, a receipt will be sent to the intermediary.
This amendment, approved by the SEBI Board on December 20, 2022, is issued under Section 11(1) of the Securities and Exchange Board of India Act, 1992, and Section 10 of the Securities Contracts Regulation Act, 1956. Its purpose is to protect investor interests, promote the development of the securities market, and regulate the securities market.
Recognized Stock Exchanges, Depositories, and Clearing Corporations are directed to implement the circular's provisions, amend relevant bylaws, rules, and regulations, notify their members, disseminate the information on their websites, and confirm implementation to SEBI.
The circular modifies SEBI Circular No. SMDPOLICYSLCIR0997 dated May 07, 1997, and MRDDoPSEDepCir 142007 dated December 20, 2007 to the extent specified, with all other provisions remaining applicable.
The complete circular is available on the SEBI website under Legal/Circulars (www.sebi.gov.in). For further information, contact Vishal Shukla, General Manager, Market Regulation Department, at vishals@sebi.gov.in.
Key Entities Referenced
Securities and Exchange Board of India: Regulatory body for the securities market in India.
Securities Lending Scheme, 1997: A scheme introduced by SEBI to facilitate securities settlement.
Stock Exchanges: Recognized entities where securities are traded.
Depositories: Organizations holding securities in electronic form.
Clearing Corporations: Entities responsible for clearing and settlement of securities transactions.
Securities Contracts Regulation Act, 1956: An act of the Parliament of India that regulates the securities market.
Securities and Exchange Board of India Act, 1992: An act of the Parliament of India that established the Securities and Exchange Board of India.
Vishal Shukla: General Manager, Market Regulation Department, SEBI
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Securities and Exchange Board of India
CIRCULAR
SEBI/HO/MRD/MRD-POD-2/P/CIR/2023/41 March 27, 2023
To
All Recognized Stock Exchanges, Depositories and Clearing Corporations
Dear Sir/ Madam,
Sub: Amendment to Securities Lending Scheme, 1997
1. SEBI, vide Circular No. SMD/POLICY/SL/CIR-09/97 dated May 07, 1997 introduced the
Securities Lending Scheme to facilitate securities settlement. Further, to enable
settlement of securities sold short, SEBI vide Circular No. MRD/DoP/SE/Dep/Cir-
14/2007 dated December 20, 2007 has, inter-alia, decided to put in place a full-fledged
securities lending and borrowing (SLB) scheme under the over-all framework of
Securities Lending Scheme, 1997. The SLB framework has been subsequently modified
from time to time.
2. SEBI Board in its meeting held on December 20, 2022 has approved to amend SEBI
Regulations & guidelines to dispense with the option of payment through Demand Draft
and ensure that the payment of fees /penalties/recoveries to be made only through digital
mode of payment.
3. In pursuance thereof, it has been decided to introduce the following changes in the
Securities Lending Scheme, 1997:
a) Point 7 under Annexure-B (Schedule of Fees) stands modified and be read as
follows:
“7. Approved intermediaries are requested to send the fee payable, as
stated above by way of direct credit into the bank account through
NEFT/RTGS/IMPS or online payment using the SEBI payment gateway or
any other mode as may be specified by SEBI from time to time”
b) Point 8 under Annexure-B stands modified and read as follows:
“8. A receipt shall be sent to the approved intermediaries after the
realization of the payment through the any of the modes specified at
Point 7”
4. SEBI circular dated May 07, 1997 shall, accordingly, be modified to the above extent.
All other provisions of the said SEBI circulars shall continue to remain applicable.
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Securities and Exchange Board of India
5. The provisions of this circular shall come into effect from April 01, 2023.
6. Stock Exchanges and Clearing Corporations are directed to:
a) take necessary steps to put in place systems for implementation of the circular,
including necessary amendments to the relevant bye-laws, rules and regulations;
b) bring the provisions of this circular to the notice of their members and also
disseminate the same on their websites; and
c) confirm to SEBI, that the provisions of this circular have been implemented.
7. This circular is being issued in exercise of powers conferred under Section 11(1) of the
Securities and Exchange Board of India Act, 1992, read with Section 10 of the Securities
Contracts (Regulation) Act, 1956 to protect the interests of investors in securities and to
promote the development of, and to regulate the securities market.
8. This circular is available on SEBI website at www.sebi.gov.in at “Legal→Circulars”.
Yours faithfully
(Vishal Shukla)
General Manager
Market Regulation Department
Email: vishals@sebi.gov.in
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