Archive · 20 Aug 2026
SEBI Warns of Immediate Action Against CAS Manipulation
India’s stock-market regulator uses a process called CAS to help set closing prices for some futures and options stocks.
The process matches buying and selling orders during a special auction.
SEBI Chairman Tuhin Kanta Pandey warned that anyone trying to manipulate CAS will face quick and strict action.
He said CAS is more transparent than the older VWAP method.
SEBI said it has not observed manipulation since CAS began, although some market participants have raised concerns about the new system.
More mutual funds and proprietary traders are joining the process.
Brokers may soon accept orders during the five minutes before the auction starts.
This change is intended to help prices and trading work more smoothly.
SEBI Chairman Tuhin Kanta Pandey warned of strict, immediate action against attempts to manipulate or discredit the Closing Auction Session.
Pandey said CAS offers greater transparency and makes manipulation easier to detect than the former VWAP-based system.
SEBI said CAS participation is increasing among mutual funds and proprietary traders while it examines remaining participation constraints.
Brokers have been asked to accept after-market orders from 3:15 p.m. to 3:20 p.m. before CAS to improve liquidity and price discovery.
CAS began on August 3, and brokers may start accepting orders during the transition period in September after making required technology changes.
- Who
- SEBI Chairman Tuhin Kanta Pandey, the Securities and Exchange Board of India, brokers, mutual funds, proprietary traders and other market participants.
- What
- SEBI warned of immediate action against CAS manipulation and is encouraging greater participation through pre-CAS after-market orders.
- When
- The warning was reported on August 19, 2026; CAS was introduced on August 3, and pre-CAS orders may begin in September.
- Where
- At a FICCI event in Mumbai; the mechanism applies to India’s securities market.
- Why
- To protect the integrity of CAS, improve transparency and strengthen liquidity and price discovery.
SEBI’s Position
Market Participants’ Concerns
Transparency and manipulation risk
SEBI’s Position
SEBI says CAS is more transparent than the former VWAP-based system and gives it greater ability to detect manipulation. Pandey warned that any attempt to manipulate CAS would trigger strong and immediate action.
Market Participants’ Concerns
Market participants have expressed wide-ranging concerns since CAS was introduced, while the regulator is examining constraints affecting participation.
Implementation and participation
SEBI’s Position
SEBI says participation is improving, including among mutual funds and proprietary traders, and wants the framework to remain in place.
Market Participants’ Concerns
The transition has involved technological and operational challenges, with brokers’ systems at different stages of readiness. The initial CAS period has also been described as involving teething troubles.
Pre-CAS orders
SEBI’s Position
SEBI has asked brokers to accept after-market orders between 3:15 p.m. and 3:20 p.m. to improve liquidity and price discovery.
Market Participants’ Concerns
Brokers must make technology changes before implementing the new order window, so the start date may vary by broker.
- Regulator
- Securities and Exchange Board of India (SEBI)
- Chairman
- Tuhin Kanta Pandey
- CAS duration
- A 20-minute auction window beginning at 3:15 p.m. after continuous trading ends
- Covered securities
- Futures and options stocks
- Transition period
- Orders are currently not accepted from 3:15 p.m. to 3:20 p.m., while reference prices are calculated and systems transition to CAS
- Proposed order window
- Brokers may accept after-market orders during the 3:15–3:20 p.m. period
- Reported date
- August 19, 2026
