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SEBI Reviews Derivatives Expiry Settlement Framework After Closing Auction Rollout
India’s market regulator, SEBI, is looking at how prices are set for some derivatives when they expire.
This review follows the introduction of a system called the Closing Auction Session.
That system brings buy and sell orders together to set one closing price.
SEBI says it wants markets where investors can trade, manage risks, and have confidence in prices.
It is also considering changes to limits on some commodity contracts.
The regulator is discussing tax issues that affect people delivering commodities through exchanges.
Foreign investors can now take part in non-agricultural commodity derivatives.
SEBI is also working on changes involving investment disclosures, bonds, and share buybacks.
SEBI Chairman Tuhin Kanta Pandey said the regulator is reviewing derivatives settlement prices on expiry days following the introduction of the Closing Auction Session.
The Closing Auction Session is intended to improve end-of-day price discovery by matching orders at a single equilibrium price.
SEBI wants deeper cash markets, stronger securities borrowing and lending, and more effective hedging and arbitrage.
The regulator is examining position limits for non-agricultural commodity contracts and continuing discussions on GST issues affecting commodity deliveries.
Foreign portfolio investors have been given access to non-agricultural commodity derivatives, while SEBI is also pursuing several capital-market reforms.
- Who
- SEBI Chairman Tuhin Kanta Pandey and the Securities and Exchange Board of India.
- What
- SEBI is reviewing derivatives settlement prices on expiry days and examining other market measures.
- Where
- At the Commodity and Capital Market Participants Association of India’s 12th International Convention in New Delhi.
- When
- Saturday; the article does not specify a date.
- Why
- To address concerns about expiry-day settlement prices after the Closing Auction Session rollout and support more efficient, liquid, and trusted markets.
Key facts
- Regulator
- Securities and Exchange Board of India (SEBI)
- Chairman
- Tuhin Kanta Pandey
- Framework under review
- Settlement-price framework for derivatives on expiry days
- Related market change
- The Closing Auction Session (CAS) was introduced to improve end-of-day price discovery.
- Commodity market issue
- SEBI is examining position limits for non-agricultural contracts.
- Investor access
- Foreign portfolio investors have been given access to non-agricultural commodity derivatives.
- Other reforms mentioned
- Standardised prospectus disclosures, bond distribution measures, flexibility for corporate bond, REIT and InvIT investors, and exchange-based open-market share buybacks.
Sources
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