SEBI Chairman Tuhin Kanta Pandey has signaled that the recently implemented Closing Auction Session (CAS) will remain a fixture of Indian market operations. Despite widespread industry debate following its August 3 debut, the regulator remains committed to the structure while acknowledging the need for potential fine-tuning.
The introduction of the session has led to increased volatility during the final minutes of trading, sparking complaints from market participants regarding legacy software compatibility and the management of derivative positions. Critics argue these hurdles complicate daily trade execution.
Addressing these grievances, the regulator maintains that there is no evidence of systemic manipulation or foul play during these periods. However, analysts at Bernstein have warned that the implementation could lead to a dip in index-options volumes as traders adjust to the evolving environment.
Moving forward, the regulatory body plans to conduct a thorough review to address specific friction points identified during the rollout. By studying these implementation concerns, SEBI aims to streamline the process without abandoning the mechanism that is set to become a permanent aspect of the closing bell.
