SEBI Clarifies No Change in Existing Regulatory Framework for Short-Selling

  • Blog|News|Company Law|
  • 2 Min Read
  • By Taxmann
  • |
  • Last Updated on 23 December, 2025

Latest from Taxmann

SEBI short selling clarification

PR No. 85/2025, Dated: 21.12.2025

1. Background

The Securities and Exchange Board of India (SEBI) has issued a clarification in response to a media report which incorrectly suggested that certain changes to the short-selling framework would become applicable from December 22, 2025.

2. SEBI’s Clarification

SEBI has categorically stated that:

  • There is no change whatsoever in the existing regulatory framework governing short selling in the Indian securities market.
  • Consequently, the question of any modification or revised framework taking effect from December 22, 2025 does not arise.

The regulator has clarified that the media report was factually incorrect.

3. Status of the Current Short-Selling Regime

  • The existing short-selling regulations and guidelines continue to apply without any amendment.
  • All market participants must continue to comply with the prevailing norms as currently prescribed by SEBI and the stock exchanges.

There has been no notification, circular, or regulatory amendment issued by SEBI altering the short-selling framework.

4. Regulatory Intent

Through this clarification, SEBI seeks to:

  • Prevent market confusion and misinformation
  • Maintain regulatory certainty and stability
  • Reassure market participants that no abrupt or unnotified changes are being introduced
  • Ensure that trading and compliance decisions are based only on official regulatory communications

5. Implications for Market Participants

5.1 For Traders and Investors

  • No change in short-selling permissions, obligations, or restrictions
  • Trading strategies should continue to align with the current framework

5.2 For Intermediaries and Compliance Teams

  • No updates required to internal systems, policies, or disclosures
  • Continue monitoring only official SEBI circulars and exchange notices

6. Key Takeaway

SEBI has unequivocally denied reports of any impending change to the short-selling framework. The existing regulatory regime remains fully intact, and no amendment is scheduled to take effect on December 22, 2025 or any other date, unless formally notified by the regulator.

Click Here To Read The Full Press Release

Disclaimer: The content/information published on the website is only for general information of the user and shall not be construed as legal advice. While the Taxmann has exercised reasonable efforts to ensure the veracity of information/content published, Taxmann shall be under no liability in any manner whatsoever for incorrect information, if any.

Taxmann Publications has a dedicated in-house Research & Editorial Team. This team consists of a team of Chartered Accountants, Company Secretaries, and Lawyers. This team works under the guidance and supervision of editor-in-chief Mr Rakesh Bhargava.

The Research and Editorial Team is responsible for developing reliable and accurate content for the readers. The team follows the six-sigma approach to achieve the benchmark of zero error in its publications and research platforms. The team ensures that the following publication guidelines are thoroughly followed while developing the content:

  • The statutory material is obtained only from the authorized and reliable sources
  • All the latest developments in the judicial and legislative fields are covered
  • Prepare the analytical write-ups on current, controversial, and important issues to help the readers to understand the concept and its implications
  • Every content published by Taxmann is complete, accurate and lucid
  • All evidence-based statements are supported with proper reference to Section, Circular No., Notification No. or citations
  • The golden rules of grammar, style and consistency are thoroughly followed
  • Font and size that’s easy to read and remain consistent across all imprint and digital publications are applied

Leave a Reply

Your email address will not be published. Required fields are marked *

«
»

Everything on Tax and Corporate Laws of India

To subscribe to our weekly newsletter please log in/register on Taxmann.com

Author: Taxmann

Taxmann Publications has a dedicated in-house Research & Editorial Team. This team consists of a team of Chartered Accountants, Company Secretaries, and Lawyers. This team works under the guidance and supervision of editor-in-chief Mr Rakesh Bhargava.

The Research and Editorial Team is responsible for developing reliable and accurate content for the readers. The team follows the six-sigma approach to achieve the benchmark of zero error in its publications and research platforms. The team ensures that the following publication guidelines are thoroughly followed while developing the content:

  • The statutory material is obtained only from the authorized and reliable sources
  • All the latest developments in the judicial and legislative fields are covered
  • Prepare the analytical write-ups on current, controversial, and important issues to help the readers to understand the concept and its implications
  • Every content published by Taxmann is complete, accurate and lucid
  • All evidence-based statements are supported with proper reference to Section, Circular No., Notification No. or citations
  • The golden rules of grammar, style and consistency are thoroughly followed
  • Font and size that's easy to read and remain consistent across all imprint and digital publications are applied