NSE Clearing will introduce shorter-tenure contracts under its Securities Lending and Borrowing (SLB) scheme, with the reverse leg of trades to be settled on the third day after the transaction, aimed at providing participants with a shorter contract option. The new contracts, to be introduced under the “R3” series, will be generated and made available on a daily basis, NSE Clearing said in a circular on Friday.
The first leg of trades executed on the transaction day will continue to be settled on T+1, while the corresponding reverse leg will be scheduled for T+3, excluding settlement holidays. The shorter-tenure contracts will be available only for stocks eligible for trading in the Equity Derivatives Segment, according to the circular. Unlike existing SLB contracts, the R3 series will not be foreclosed in case of an annual general meeting or extraordinary general meeting.
NSE Clearing also said the facility for repay, recall and rollover will not be available for the shorter-tenure contracts. Other provisions relating to market timings, clearing, settlement, risk management and corporate action handling will remain applicable as they are for existing SLB contracts. The R3 contracts will be available from the transaction day of August 17, while the security file shared by the exchange at the end of August 14 will include the additional series.
