NSE Clearing Limited announced on August 14 that it will introduce a new series of securities‑lending contracts, called R3, starting August 17. These contracts are part of the Securities Lending and Borrowing (SLB) Scheme and will be offered on a daily basis.
The R3 contracts have a shorter tenure compared to existing SLB agreements. The first leg of an SLB transaction, executed on the transaction day (T Day), will settle on T+1, while the reverse leg will settle on T+3, excluding settlement holidays.
Only stocks that are eligible for trading in the equity derivatives segment can be used in R3 contracts. This ensures that the contracts are limited to securities with established derivatives markets. Traders must confirm eligibility before initiating a transaction.
Unlike current SLB contracts, R3 agreements will not be foreclosed during an Annual General Meeting (AGM) or Extraordinary General Meeting (EGM). Additionally, the facilities of repay, recall and rollover will not be available for these shorter‑tenure contracts.
All other provisions—such as market timings, clearing, settlement, risk management and corporate action treatment—remain unchanged from the existing SLB framework. This continuity helps participants adjust to the new terms without altering their overall compliance.
Securities Lending and Borrowing Mechanism (SLBM) allows investors to lend shares they hold to other market participants for a fee. The borrower pays a lending fee, while the exchange and clearing corporation manage matching, collateral and risk.
The R3 series gives market participants a shorter holding period for securities lending, providing greater flexibility for short‑term borrowing and lending needs. Traders can now access a more agile framework while still benefiting from the familiar SLB infrastructure.