NSE Clearing introduces shorter SLB contracts with T+3 reverse settlement
NSE Clearing will roll out shorter-tenure Securities Lending and Borrowing contracts under the SLB scheme, with the reverse leg settled on T+3. The R3 series will start from August 17, 2026 and apply to stocks eligible for the Equity Derivatives Segment.
Key takeaways
- NSE Clearing is introducing a new set of SLB contracts named the R3 series.
- The R3 contracts settle the reverse leg on T+3 while the initial leg settles on T+1.
- Availability begins on the transaction day of August 17, 2026 and applies only to stocks eligible for the Equity Derivatives Segment.
- AGM/EGM events will not foreclose the R3 contracts, and repayment, recall, and rollover features are not included.
What Happened
The National Stock Exchange (NSE) Clearing plans to launch shorter-tenure contracts within its Securities Lending and Borrowing (SLB) framework. These new contracts, designated as part of the R3 series, will have the reverse leg settled on the third day after a transaction, while the initial leg of trades on the transaction day will continue to settle on the next day (T+1). The R3 contracts will be generated and made available daily, and they will apply only to stocks that are eligible for trading in the Equity Derivatives Segment. An important change is that these contracts will not be foreclosed in the event of an annual general meeting (AGM) or extraordinary general meeting (EGM), and the facility for repay, recall, and rollover will not be applicable to the shorter-tenure contracts. The broader SLB framework will continue to follow existing provisions related to market timings, clearing, settlement, risk management, and corporate action handling.
The R3 series is scheduled to be available from the transaction day of August 17, 2026. The exchange had noted that the security file shared at the end of August 14 would include this additional series.
Why It Matters
The introduction of shorter-tenure SLB contracts expands the existing range of SLB tenures, which currently include fixed monthly tenures with specified reverse-leg settlement dates and tenures ranging from three days to 12 months. By enabling a T+3 reverse settlement for the R3 contracts and excluding features like repayment, recall, and rollover, NSE Clearing aims to provide participants with a more flexible but tightly defined option within the SLB framework. This change could affect trading strategies and liquidity management for market participants who use securities lending and borrowing services.
Background
Under the SLB scheme, securities lending and borrowing are facilitated on an automated screen-based platform, with orders matched on a price-time priority basis. Lenders quote a lending fee per share, and contracts cover a range of tenures. The existing framework already includes mechanisms for early recall requests by lenders and early repayment and relending by borrowers, though these are associated with the longer-tenure contracts rather than the new R3 series.
Key Facts
- The NSE Clearing will introduce shorter-tenure SLB contracts under the R3 series.
- The reverse leg of R3 SLB trades will settle on T+3; the first leg retains T+1 settlement.
- The R3 contracts will be generated and made available daily.
- R3 contracts apply only to stocks eligible for trading in the Equity Derivatives Segment.
- R3 contracts will not be foreclosed during AGM or EGM events.
- The repay, recall, and rollover facilities are not available for the R3 contracts.
- The R3 series becomes available from the transaction day of August 17, 2026.
- The security file shared at the end of August 14 will include the R3 series.
- Other provisions of market timings, clearing, settlement, risk management and corporate action handling remain as for existing SLB contracts.
What Happens Next
The R3 series will be active starting August 17, 2026, with the relevant security file updated accordingly. Market participants will begin trading these shorter-tenure SLB contracts from that date, respecting the T+3 reverse settlement schedule and the exclusions on repayment, recall, and rollover.
Sources reviewed
Project Chintan independently synthesized and analyzed information cross-checked across the sources listed above.
