The Indian capital market regulator imposed some curbs on short- selling, starting this week to curb the ongoing volatility and equity sell-off in the stock market.
Short selling refers to a strategy by which traders bet on a decline in prices and try to profit at a time when the markets are falling.
Indian indices have fallen more than 25% from their record highs reached in January. In market parlance, a fall of over 20% is looked upon as a sign of the markets entering a bear market.
Regulators in a few countries like Spain, South Korea and Italy have banned short selling amid huge volatility and a fall in stock prices.
During the global financial crisis of 2008, the US Securities Exchange Commission (SEC) had banned short-selling in financial stocks.