The Hindu Business Line : FIIs have not lent shares abroad

There was a fear that the shares lent overseas by FIIs were likely to be sold by the parties to which they were lent, and that this would have a short-selling effect in the domestic market, leading to a sell off in those securities which were lent.

SEBI had expressed its disapproval of such lending and had requested FIIs to reverse their lending positions.

That FIIs have not lent shares recently appears to indicate that the message to them from Indian authorities is pretty firm, said brokers. However, there are no means of auditing the activity of any entity overseas, said legal experts.

When FIIs submitted their cumulative lending position as on October 9, SEBI officials were not unduly alarmed.

The lent assets were not considered so large as to seriously affect the domestic market, said sources close to SEBI.

However given the intensely bearish mood in the market, the message to foreign institutional investors to not lend Indian shares overseas still prevails, they said. .

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