NSE Clearing plans to launch a new ‘R3’ series of shorter-duration stock lending and borrowing contracts, allowing for quicker execution with settlement in three trading days, starting August 17.
NSE Clearing is set to launch shorter-duration stock lending and borrowing contracts from August 17, adding a new option for market participants that want a quicker turnaround than the existing monthly tenures. In a circular issued on Friday, the clearing arm of the National Stock Exchange said the new “R3” series will be generated daily and will move to settlement three trading days after the transaction date, excluding settlement holidays.
Under the revised structure, the first leg of each trade will continue to settle on T+1, while the reverse leg will be completed on T+3. The contracts will be available only in stocks that are eligible for trading in the equity derivatives segment, according to NSE Clearing. The exchange said the new series will not be closed out because of annual general meetings or extraordinary general meetings, marking a key difference from existing SLB contracts.
The new contracts will also exclude early exit tools that are available in the broader SLB framework. NSE Clearing said participants will not be able to use repay, recall or rollover facilities for the R3 series. Other rules covering market hours, clearing, settlement, risk controls and corporate action processing will continue to apply as they do for existing SLB trades.
The Securities Lending and Borrowing mechanism allows investors to lend securities for a fee through an automated, screen-based system that matches orders by price and time priority. NSE Clearing’s own disclosures show that the platform already supports a range of settlement processes, including the first leg, reverse leg, recall, repay, auction and rollover deals. The introduction of the R3 series adds a shorter-tenure product to a market that has traditionally offered contracts running from three days to 12 months, and comes after earlier changes to SLB expiry timing in 2025, when the exchange shifted reverse-leg settlement to the first Tuesday of the month for some contracts.
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