NSE New Rule From Monday: Share Buying and Selling Gets Easier; Know What Changes for Investors

NSE Clearing is introducing a new short-tenure contract series under its Securities Lending and Borrowing (SLB) framework from August 17, 2026. The new contracts, designated as the R3 series, will give market participants an additional shorter-duration option for lending and borrowing shares.

Under the new mechanism, the first leg of an SLB transaction will continue to settle on a T+1 basis, while the reverse leg will be settled on T+3, excluding settlement holidays.

What Is the New R3 Series?

NSE Clearing announced the new contract series through a circular issued on Friday. The R3 contracts will be available daily and are designed specifically for short-tenure securities lending and borrowing transactions.

The new series will be available only for securities that are eligible for trading in the equity derivatives segment.

The introduction of R3 contracts gives market participants greater flexibility compared with the existing SLB structure, where contracts generally operate on fixed monthly tenures and predetermined reverse-leg settlement dates.

When Will the New NSE Contracts Start?

The R3 series will become available from the trading day of August 17.

Details of the new series were also scheduled to be incorporated into the security file released by the exchange at the end of trading on August 14.

How Will T+1 and T+3 Settlement Work?

The new settlement structure has two separate legs:

First leg: The transaction executed on day T will settle on T+1.

Reverse leg: The return transaction will settle on T+3.

Settlement holidays: These will be excluded when determining the settlement date.

This structure is intended to provide participants with a shorter-duration SLB product while maintaining the existing clearing and settlement framework.

Important Restrictions Under R3 Contracts

While the new contracts provide greater flexibility in terms of duration, they also come with specific restrictions.

R3 contracts will not be prematurely closed if the underlying company holds an Annual General Meeting (AGM) or Extraordinary General Meeting (EGM).

In addition, participants will not have access to certain facilities available under existing SLB contracts, including:

Repayment

Recall

Rollover

Other provisions covering market timings, clearing, settlement, risk management and corporate actions will continue to apply.

What Is Securities Lending and Borrowing?

The SLB mechanism allows investors to lend and borrow securities through an automated, screen-based platform.

Orders are matched according to price-time priority, with participants quoting a lending fee per share.

Under the existing framework, lending and borrowing contracts can generally have tenures ranging from three days to 12 months.

The lender can recall securities before the scheduled expiry in applicable contracts, while borrowers may have options such as early repayment and re-lending under the existing framework.

What Does the R3 Series Mean for Investors?

The introduction of R3 contracts provides market participants with another way to participate in the securities lending and borrowing market through a shorter-duration contract structure.

The key distinction is that the new series combines a T+1 first-leg settlement with a T+3 reverse-leg settlement while removing certain features such as recall, repayment and rollover.

For investors and market intermediaries, understanding these differences will be important before using the new contracts.