2 weeks ago
Sebi Chairman Says Closing Auction Session Here to Stay
The stock market in India has a new way of deciding the closing price of stocks.
It is called the Closing Auction Session, or CAS.
At the end of the trading day, there is a special auction where buyers and sellers place orders.
The price from this auction becomes the official closing price.
The head of the market regulator, Mr. Pandey, said this new system is here to stay.
He said the regulator is listening to feedback and may make small improvements.
Some people complained about the new system on social media.
Mr. Pandey said some complaints may go away as more people use the system.
He also said people should put effort into learning the new system.
Sebi Chairman Tuhin Kanta Pandey said the Closing Auction Session (CAS) framework is 'here to stay'.
Sebi is analysing feedback from market participants for possible improvements to CAS, which took effect on August 3.
Under CAS, continuous trading in these stocks ends at 3:15 pm and the auction price becomes the official closing price.
Non-F&O stocks continue trading until 3:30 pm, while stock and index derivatives remain open until 3:40 pm.
Pandey said many concerns could be eliminated as participation rises and noted some participants still use systems aligned to the older volume-weighted average price framework.
- Who
- Sebi Chairman Tuhin Kanta Pandey
- What
- Announced that the Closing Auction Session (CAS) framework is here to stay while Sebi analyses feedback for possible improvements
- Where
- An event on cybersecurity at the Sebi-promoted National Institute of Securities Markets on the outskirts of Mumbai
- When
- Monday, after CAS came into effect on August 3
- Why
- To reaffirm the regulator's commitment to the new closing price mechanism and address stakeholder concerns
Sebi's position
Market participants' concerns
Future of the CAS framework
Sebi's position
Sebi says CAS is here to stay and is a major reform in the markets, with only possible improvements under review.
Market participants' concerns
Some market participants have pointed out shortcomings in the new system, especially on social media, including settlement uncertainty during the auction window on expiry days.
Cause of the issues
Sebi's position
Pandey said many concerns could be eliminated as participation rises and suggested participants did not put in the effort to learn the new system.
Market participants' concerns
Participants face issues partly because many are still on systems aligned to the older volume-weighted average price framework, leaving option traders with limited visibility on the final settlement level.
Key facts
- Regulator
- Securities and Exchange Board of India (Sebi)
- Chairman
- Tuhin Kanta Pandey
- Framework
- Closing Auction Session (CAS)
- Effective date
- August 3
- Continuous trading ends (CAS stocks)
- 3:15 pm
- Non-F&O stocks trading ends
- 3:30 pm
- Stock and index derivatives trading ends
- 3:40 pm
- Event venue
- National Institute of Securities Markets, outskirts of Mumbai
Quotes
Tuhin Kanta Pandey
Chairman of the Securities and Exchange Board of India (Sebi)
“We are looking at all the suggestions, I have myself seen a number of suggestions which have come from social media. Our teams have gone through it, they are discussing with the participants.”
thehansindia.com
“The CAS is here to stay for sure. Only, we will see if there are certain constraints or certain issues that we can improve. Certainly, we will improve.”
thehansindia.com
telegraphindia.com
Sources
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