Archive · 14 Sep 2026
SEBI CAS Proposals Seen Boosting Brokers, Exchanges Despite BSE Concerns
India’s market regulator, SEBI, wants to change how some derivatives prices are settled.
The changes would use trading prices averaged over time or prices from a closing auction.
They would also restrict some order cancellations and move unexecuted iceberg orders into the auction.
Jefferies said these steps could make expiry days less volatile.
The brokerage expects the new approach to begin around October or November 2026.
It believes Groww could benefit because derivatives trading provides a large share of its revenue.
Jefferies is less optimistic about BSE because options growth has been weak and its market share may have reached a ceiling.
It also expects tighter bank-guarantee rules and a possible management transition to affect BSE.
Jefferies projected strong profit growth for Groww through FY29.
Jefferies said Securities and Exchange Board of India proposals could reduce uncertainty around derivatives settlement prices.
The proposals include VWAP-based settlement, a VWAP-CAS blend, limits on cancellations, and changes to iceberg orders.
Jefferies expects a VWAP-based method to be implemented in October or November 2026.
The brokerage expects lower expiry-day volatility and higher average daily derivatives turnover in the second half of FY27.
Jefferies expects Groww to benefit, while forecasting BSE underperformance because of industry, regulatory, and management risks.
- Who
- The Securities and Exchange Board of India proposed the changes; Jefferies assessed their likely effects on BSE, Groww, and exchanges and brokerages.
- What
- SEBI proposed changes to settlement prices and order handling during the closing auction session for index and single-stock derivatives.
- When
- The proposals were discussed in a Jefferies report released Monday; Jefferies expects a VWAP-based method in October or November 2026 and a possible BSE management transition in June 2027.
- Where
- The changes concern India’s securities markets.
- Why
- The proposals aim to address expiry-day volatility, settlement-price uncertainty, and possible manipulation concerns.
Expected Benefits
Risks and Constraints
Effect of CAS changes
Expected Benefits
Jefferies said the proposals could reduce uncertainty and end-of-period volatility on expiry days, benefiting brokerages and exchanges.
Risks and Constraints
The proposals are intended to address problems associated with CAS, including volatility and possible settlement-price manipulation, but their final outcome remains subject to implementation.
Outlook for market businesses
Expected Benefits
Groww could benefit substantially if CAS-related issues are resolved, supported by derivatives trading, existing-client growth, market-share gains, and new initiatives.
Risks and Constraints
BSE could underperform because options-industry growth has stagnated for two years, its market share may have reached a ceiling, and it faces tighter bank-guarantee rules and a possible management transition.
- Regulator
- Securities and Exchange Board of India (SEBI)
- Proposed settlement methods
- Volume weighted average price (VWAP) or a blend of VWAP and the closing auction session (CAS)
- Order changes
- Limit-order cancellations beyond plus or minus 1% of the reference price during CAS would be discontinued.
- Expected implementation
- Jefferies expects a VWAP-based method in October or November 2026.
- Groww derivatives revenue
- About 55% of Groww’s revenue comes from derivative trading.
- Groww profit outlook
- Jefferies expects net profit to grow at a 30% compound annual growth rate from FY26 to FY29.
- BSE risk outlook
- Jefferies expects up to a 10% negative impact on BSE’s premium turnover over the next year from tighter bank-guarantee norms.