Capital market regulator, Sebi, has prohibited lenders and borrowers from entering into a direct agreement under theSecurities Borrowing and Lending framework.

Instead, the agreement will now be between the Authored Intermediary and the Clearning Members.

“The Authorised Intermediary (AIs) shall enter into an agreement with Clearing Members (CMs) for the purpose of facilitating lending and borrowing of securities… The AIs shall frame a rights and obligations document laying down the rights and obligation of CMs and clients for the purpose of lending and borrowing of securities,” said Sebi circular issued on Tuesday.

The changes to the framework were based on representations made by the industry for an agreement between the clearing member and clients, the circular said. (Business Standard)