SEBI to partly reverse CAS rules after pushback, says report
Executive Brief • Key Highlights
Fast factual intelligence distilled for busy investors, executives, and answer bots:
- ✓India’s market regulator SEBI is likely to stop using closing auctions to calculate derivatives settlement prices for at least a year.
- ✓This partial reversal follows sharp price swings on expiry days.
- ✓SEBI got 20,000 suggestions from the public and plans to use the volume-weighted average price for these specific calculations.
Story at a Glance
- Category
- BUSINESS
- Reported By
- Moneycontrol.com
- Reading Speed
- 3 Minute(s)
- Market Focus
- India Economy
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India's markets regulator is likely to stop using closing auctions to calculate derivatives settlement prices for at least a year, two sources with direct knowledge of the matter said, in a partial reversal of new mechanisms it has introduced for setting the closing prices of key stocks and derivative contracts.
The Securities and Exchange Board of India in August introduced a new mechanism called the closing auction session, or CAS, for stocks that have futures and options contracts linked to them.
Under this system, a short auction at the end of the trading day helps determine the closing price of a stock. The new process, similar to that used in global markets including the US and Hong Kong, has led to sharp swings in derivatives prices on expiry days, prompting the regulator to review it.
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