Indian market regulators are set to overhaul how derivative settlement prices are calculated on expiry days. Following the successful implementation of the Closing Auction Session, the Securities and Exchange Board of India (SEBI) is now turning its focus toward refining derivatives volatility.
Speaking at the 11th JP Morgan India Conference, Tuhin Kanta Pandey highlighted that the regulator is eager to resolve systemic grievances regarding price calculation. The move aims to minimize potential market shocks that often occur during high-volume contract expirations.
Key regulatory steps include:
- Launching a formal public consultation process.
- Gathering stakeholder feedback on settlement mechanisms.
- Analyzing the impact of expiry-day liquidity on price integrity.
The regulatory body has already released a consultation paper to invite industry commentary. By addressing these structural gaps, officials hope to foster a more predictable environment for institutional and retail traders alike.
