• Nithin Kamath, CEO of Zerodha, highlighted the issue of limited short-selling in Indian markets, arguing it causes market distortions and impairs price discovery.
• He noted the difficulty in shorting stocks due to the limited availability of F&O stocks and the costs associated with rolling over contracts.
• Kamath emphasized the importance of short-sellers as market janitors who enhance market efficiency.
• India's market is structurally long-only because borrowing stock is difficult, despite SEBI's past recognition of short-selling and securities lending.
• While SEBI has made some changes to disclosure norms, no major structural changes have occurred.
• Disclosing short positions upfront may disadvantage institutional investors, and tracking retail short sales poses challenges for brokers.
• Kamath suggests SEBI consider widening short-selling to include the top 500 stocks and allowing institutions to keep short positions undisclosed up to a certain threshold.
