The Securities and Exchange Board of India (Sebi) is taking proactive steps to stabilize the derivatives market by addressing ongoing concerns regarding settlement price calculations on expiry days.
To mitigate sudden price fluctuations, the regulator is weighing several adjustments, including the implementation of a blended Volume Weighted Average Price (VWAP) model. Alternatively, authorities are considering a reversion to the legacy VWAP system, which many market participants have signaled as a more reliable preference.
Public Consultation Underway
Sebi has officially opened the floor for public feedback, emphasizing its commitment to transparency and robust market architecture. The goal is to finalize a mechanism that balances institutional efficiency with individual trader protection.
By revisiting these settlement frameworks, the regulator aims to reduce the speculative frenzy often associated with weekly expiry sessions, fostering a more predictable environment for domestic investors.
