MoneyBazaars

“Why would FIIs want to play the over-regulated SLB market, when the offshore market is far more efficient and a lot quicker,” says an official at the Indian arm of a US-based brokerage. At present, the tenure of a borrowing/ lending contract is seven days. This means that the borrowed shares have to be returned on the eighth day from transaction, to the lender. Market participants say this time frame is too short. In the OTC market, players have the flexibility to borrow shares for up to a month or more. But the bigger problem is that of margins