3 days ago
BSE Shares Rise as SEBI Reviews Derivatives Settlement Rules
BSE is a company whose shares rose after SEBI said it may change some market rules.
The rules involve how derivatives contracts are settled when they expire.
SEBI’s new Closing Auction Session helps decide official stock closing prices.
Some traders said this system caused differences between exchange index values and sudden changes in options prices.
They also worried that prices could be manipulated on expiry days.
Low trading activity during the auction was another concern.
BSE CEO Sundararaman Ramamurthi said traders suggested separating derivatives expiry from the auction system.
SEBI plans to publish a paper explaining possible changes within a week.
Investors reacted positively to the announcement, and BSE shares gained nearly 5%.
BSE shares climbed nearly 5% on September 4 after SEBI said it would review derivatives settlement rules.
The review follows concerns about the Closing Auction Session, including differing index closes and sharp options-price movements.
SEBI is considering changes to how derivatives contracts are settled and plans to publish a discussion paper within a week.
BSE opened at ₹3,400, rose to ₹3,474, and traded 4.4% higher at around 10:45 a.m.
BSE CEO Sundararaman Ramamurthi said limited liquidity had restricted participation in the closing auction process.
- Who
- The Securities and Exchange Board of India, BSE, and market participants, including BSE CEO Sundararaman Ramamurthi.
- What
- SEBI is reviewing the methodology used to settle derivatives contracts after concerns about the Closing Auction Session.
- Where
- The review concerns trading and settlement processes on Indian stock exchanges, including BSE.
- When
- SEBI announced the review on September 4; the Closing Auction Session was launched on August 3.
- Why
- Market participants raised concerns about limited auction liquidity, differing index closing levels, sharp options-price movements, and possible manipulation on expiry days.
Key facts
- BSE opening price
- ₹3,400 on September 4, compared with a previous close of ₹3,306.
- Intraday high
- ₹3,474, more than 5% above the previous close.
- Morning trading level
- BSE shares were up 4.4% around 10:45 a.m. and later reported 4.5% higher at ₹3,453.8.
- Closing Auction Session
- Launched on August 3 to determine official closing prices for stocks.
- SEBI action
- The regulator said it would consider changes to derivatives settlement-price calculations.
- Next step
- SEBI said it would issue a discussion paper within a week.
- BSE CEO
- Sundararaman Ramamurthi said participation in the auction remained limited because of liquidity challenges.
Sources
Related news
SEBI Reviews Derivatives Settlement Methodology After CAS Volatility
CAS Review May Restore Old Derivatives Settlement Model
Sebi Chairman Says Closing Auction Session Here to Stay
Kirit Somaiya Urges SEBI to Suspend and Redesign CAS
Somaiya urges SEBI to suspend and redesign CAS
India’s Closing Auction Session Needs an Evidence-Based Reset
Indian Stocks Fall, Volatility Rises as Sensex, Nifty Extend Losses
Himadri Shares Rise 50% Amid Battery Materials Expansion Plans
MV Electrosystems Stock Jumps 15% Despite Weak Market
Sensex, Nifty Open Lower Amid IPO Rush, Middle East Tensions
