SEBI Rejected Media Reports; Clarifies No Changes to Short Selling Rules

On December 21, 2025, the market regulator SEBI has clarified that there are no changes to its short selling framework, dismissing recent reports suggesting otherwise. The clarification came after a media article falsely claimed that the revised rules would take effect from December 22, 2025.

In this context SEBI expressly clarifies that there is no change in the existing regulatory framework for short selling. The question of any change in this framework from tomorrow, as reported incorrectly by the media story, therefore, does not arise.”

The clarification follows reports claiming that SEBI had banned short selling in non-F&O shares from December 22.

Short Selling Rules as per SEBI

• Definition: Short selling is the sale of a stock that the seller does not currently own.
• Eligibility: All investors, including retail and institutional, are allowed to short sell.
• Restrictions: Naked short selling is prohibited; investors must deliver the securities at settlement.
• Disclosure Requirements: Institutional investors must disclose at the time of placing the order if it is a short sale. Retail investors can disclose by the end of trading hours on the same day.
• Reporting: Brokers collect scrip-wise short sale positions, consolidate the data, and upload it to stock exchanges before trading begins the next day.
• Public Access: Stock exchanges then compile and publish this information weekly for public reference.

Also Read: ICICI Prudential Enters Specialised Investment Fund Space with SEBI Filing

Conclusion

SEBI stated that its existing framework for short selling remains fully in place, and investors should not act based on incorrect media reports.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.

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