This idea is probably too ambitious and far fetched, but has Zerodha or other brokers considered pushing for regulations for a Securities Lending/Borrowing Platform on Zerodha/other brokerages, among their own customers?
SLB market on NSE barely sees any activity.
I know that for this to work, it will have to be integrated with CDSL (like the pledging mechanism) to move shares from 1 demat to another. But with CDSL becoming more digitized off late, such a platform kind of seems more practical now than at earlier times, right @nithin ?
What does SEBI think about SLB, and shorting in general? I guess regulators are usually a little wary of shorts, as they get all the blame in a market decline
Is there any discussion on this or is it completely off limits?
Zerodha or any broker can’t really match transactions between the customers. This has to be done on the exchange SLB platform. The reason SLB platform in India isn’t that popular is because we have a large derivatives market. It is easier, convenient, & cheaper for a person wanting to short a stock to do it on F&O rather than on SLB. The interest to short stock in non-F&O stocks doesn’t seem to be too much, or maybe it is because there aren’t enough lenders out there.
I guess one aspect which is a downer for SLB is that there is a 18% GST on the borrowing rate. Also whenever there are certain corporate actions (Bonus + Rights) there is a forced foreclosure.
SEBI wants India to have a vibrant SLB market. Currently the onboarding + ongoing experience of SLB isn’t that great. Solving this is on our list of things to do. Maybe once we do it, others follow and the liquidity goes up.
I guess people (i.e. retail) also doesn’t know about the SLB mechanism. It is not easy to explain how you can lend your stock to someone for a (dynamic) interest rate. If this takes off, brokers like ZD would play a key role in educating people about the possibility of lending their long term holdings.
As goes for everything, if the product is well put together, it should work
I recently did the SLB transaction for around 10k. Zerodha has deducted brokerage of 2k+ tax which makes around 2200. I feel this brokerage charge is to high can you please put cap like max 500 rs in brokerage. I appreciate if you look into this.
I agree with you on manual effort. But upto this i have executed 4 orders in SLB my brokerage crossed 8k which is too high. Put max brokerage like for e.g. 1k or 2k. As same effort is required to execute 5k SLB or 5Lakh slb order. If in future i got opportunity in which 50k slb order then Brokerage will cross 10k in that order itself. Please put some max brokerage i assume 1k is justified.
Or max brokerage for SLB charges collected by customer per year like 10k.
Can you please provide time line when this will be online. Can you please enable BSE slb i do some opportunity on BSE side also.