India’s market regulator is taking a serious look at making it easier to bet against stocks. The Securities and Exchange Board of India (SEBI) has announced a comprehensive review of its short-selling and securities lending and borrowing (SLB) rules, with the goal of nearly doubling the number of stocks available for borrowing.
What SEBI is actually doing
SEBI Chairman Tuhin Kanta Pandey laid out the review during the ET Now Market Summit on June 12, 2026. The core idea is straightforward: expand the universe of borrowable securities well beyond the roughly 224 futures and options-eligible stocks that currently dominate the lending pool.
The proposed changes would open up most stocks to covered short selling for both retail and institutional investors. Naked short selling, where you sell shares you haven’t actually borrowed, remains firmly off the table. India’s mandatory delivery obligations aren’t going anywhere.
This review builds on discussions that started in 2025 about loosening restrictions on short selling for stocks beyond the F&O segment. The only exclusions would be stocks in the trade-to-trade category, which are already subject to tighter settlement rules.
