- SEBI overhauls Indian equity derivatives trading mechanisms
- SEBI introduced a new CAS framework regulating the Indian stock market.
- The implementation of the new Closing Auction System (CAS) is currently affecting stock price discovery for companies including Trent, Bajaj Finance, and Mahindra & Mahindra.
- SEBI is investigating issues concerning the new Closing Auction System (CAS) rollout, involving large stockbrokers.
Regulator Pauses Closing Auction System Rollout in Equity Derivatives
What happened
The Securities and Exchange Board of India is likely to pause the rollout of the Closing Auction System in equity derivatives for one year. The regulator will retain the previous volume weighted average price method for settlement calculation on expiry day. This decision follows a consultation process that received over 20,000 comments, many of which requested a one-year pause.
From vccircle.com
Why it matters
The regulator introduced the Closing Auction System to determine the closing price of stocks in a phased manner. By pausing the rollout and reverting to the previous VWAP method, the regulator is adjusting the mechanism used for derivative settlement calculation.
The Securities and Exchange Board of India is currently investigating issues concerning the new Closing Auction System rollout, which is affecting stock price discovery.
From vccircle.com
Who's involved
- Securities and Exchange Board of IndiaThe capital markets regulator that introduced and is pausing the Closing Auction System
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The entities involved
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Securities and Exchange Board of India
registration authority
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Cas
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Related events
- The Securities and Exchange Board of India proposes changes to the derivative trading framework.
- The Securities and Exchange Board of India is preparing a framework to curb misuse by brokers.
- SEBI and regulatory bodies are introducing appellate stages for settlement proceedings and ultimate regulatory disputes.