The exchange will now submit the detailed business plan to Sebi and only once this is approved will it be in a position to kick-off stock lending operations.

The National Securities Clearing Corporation (NSCCL), a wholly owned subsidiary of NSE, had decided to enter into the stock lending business following delay on the part of the Stock Holding Corporation of India and Unit Trust of India to start off operations.

SHCIL has already received the Sebi nod for commencing operations. However, there has been a delay on the part of the custodian to kick-off stock lending.

In a statement issued on Tuesday, Sebi has said that the stock lending scheme which had come into force on February 6, 1997 is a scheme where the temporary needs of the borrower, like a broker, is met from the lenders portfolio, to support the trading activity or to meet thedelivery obligation.

The lender loans the securities to the borrower through an approved intermediary under an agreement which is for a specified period with the condition that the borrower shall return equivalent securities of the same type and class at the end of the specified period along with the corporate benefits accruing on the securities borrowed.So far, licenses for approved intermediaries have been granted to SHCIL, Reliance Capital and Deutsche Bank.

The exchange which has been keen to introduce stock lending as it feels that this is a counter to rival Bombay Stock Exchange's badla, has been miffed over delays in introducing the instrument.

The National Securities Depository Ltd is also putting in place a composite stock lending module to facilitate lending of shares in the demat form. Most intermediaries have already made it clear that the activity would pick up only in the demat form, as doing so in a paper-based system is extremely risky.

"We are keen to get on with the activity at theearliest. We will prepare the business plan and start off once that is approved," said NSE managing director RH Patil.

FIIs still sellers

MUMBAI: FIIs remained net sellers in the second week of July with the net outflow at Rs 19.5 crore despite the general trend witnessed in the market which indicated a positive FII outlook. However, compared with the previous week the outflow has come down considerably. Last week, the figure stood at Rs 75.7 crore. FIIs continued to remain out of the debt market for the second week in a row.