NSE Clearing will introduce shorter-tenure SLB 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. According to reports from The Hindu BusinessLine and Business Standard, the new contracts will be available from August 17, 2026, and will be generated and made available on a daily basis. 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 move is designed to provide additional flexibility in the securities lending and borrowing market, allowing market participants to execute stock-lending transactions with a three-day settlement cycle.
The R3 series contracts will be available only for stocks eligible for trading in the Equity Derivatives Segment, as reported by The Hindu BusinessLine. Unlike existing SLB contracts, the R3 series will not be foreclosed in case of an annual general meeting or extraordinary general meeting. Additionally, 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 series effectively provides market participants with a shorter holding period for securities lending transactions, compared with longer-tenure SLB contracts, giving traders and investors greater flexibility in managing short-term borrowing and lending requirements.
Under the current SLB scheme, securities lending and borrowing is facilitated through an automated screen-based platform, where orders are matched on a price-time priority basis. According to The Hindu BusinessLine, participants quote a lending fee per share, and lending and borrowing contracts can currently have tenures ranging from three days to 12 months. The mechanism is particularly useful for investors who want to earn additional income from their securities and for traders who need to borrow shares, including for short-selling. The scheme also provides lenders with a facility to make an early recall request for securities and allows borrowers to make early repayment and further relend the securities. Existing contracts are based on fixed monthly tenures with specified reverse-leg settlement dates.
The security file shared by the exchange at the end of August 14 will include the additional R3 series, as reported by The Hindu BusinessLine. The introduction of the R3 series adds a shorter-tenure option to the existing SLB framework, with the new contracts carrying a T+3 reverse settlement schedule and a separate set of conditions for corporate actions and early repayment or recall. This enhancement provides participants with a shorter contract option within the established SLB framework, with the new contracts being made available on a daily basis starting from August 17. The facility will initially be available only for stocks eligible for trading in the equity derivatives segment.
