Securities and Exchange Board of India (Sebi) Chairman Tuhin Kanta Pandey has said the new closing auction session (CAS), introduced from August 3, will remain in place, although adjustments may be made based on industry feedback. Speaking on the sidelines of an event at the National Institute of Securities Markets (NISM), Pandey said the regulator was open to addressing any operational constraints that emerge. He noted that several market participants have welcomed the new system because it provides a single price for executing trades, replacing the earlier method based on a volume-weighted average price. Pandey said there were no concerns regarding tracking error but acknowledged that some industry participants had yet to update their systems, which were built around the previous VWAP-based mechanism. He described the change as a significant market microstructure reform and said initial teething problems were expected as participants adjusted to a new system. Pandey stressed that market participants needed to devote sufficient effort to understanding and adapting to the revised process. While SEBI will consider suggestions for improvements, his comments make clear that the regulator does not plan to reverse the new closing auction mechanism. The CAS is therefore set to become a permanent part of India’s market-trading framework, with refinements possible as implementation progresses.
SEBI to Retain New Closing Auction System Despite Initial Challenges
