Sebi proposes adjustments to CAS timing and derivatives settlement prices

The Securities and Exchange Board of India (SEBI) has introduced new proposals seeking to amend the timings of the Closing Auction Session and adjust pricing mechanisms for derivatives. These changes come in response to heightened market volatility observed since the recent launch of the Closing Auction Session.

SEBI is currently considering two potential options for establishing settlement prices for derivatives, which may include the implementation of a transition break and extending the duration of trading intervals. The objective of these modifications is to enhance market stability and provide a more structured trading environment.

The regulatory body is actively inviting feedback from stakeholders regarding these proposals, which should be submitted by October 3, 2023. This engagement aims to ensure that the concerns and insights of market participants are taken into account before any formal changes are enacted. The outcome of this consultation could have significant implications for trading practices and market dynamics in the derivatives space going forward.