SEBI To Review Over 3,500 Responses On Closing Auction Session Proposals

The Securities and Exchange Board of India (SEBI) is set to examine more than 3,500 responses received on its consultation paper concerning the Closing Auction Session (CAS), SEBI Chairman Tuhin Kanta Pandey said. The regulator plans to assess the feedback and move ahead with its proposals after reviewing the submissions.

The consultation relates to proposed changes to the CAS mechanism, market timings and the method used to determine settlement prices for index and stock derivatives on expiry days. SEBI had initiated the review following the introduction of the closing auction mechanism in the equity cash market and concerns surrounding its impact on derivatives settlement prices.

Pandey said the regulator would work to examine the responses quickly before deciding on the next steps. The consultation process is aimed at gathering views from market participants and other stakeholders before any changes are implemented.

The SEBI chairman also highlighted efforts to strengthen India’s corporate bond derivatives market. He said the regulator was working on measures to increase the use of electronic systems in bond transactions and improve the efficiency of the market.

Among the areas under consideration are electronic bidding mechanisms for primary bond issues, greater regulation of online bond platforms and improvements to the request-for-quote system used for secondary-market transactions. Pandey also discussed measures concerning foreign portfolio investors (FPIs). SEBI is working with the Reserve Bank of India to simplify the process of onboarding FPIs and improve their access to Indian financial markets.

He said investment flows would ultimately depend on the opportunities and returns available in India compared with other markets. The regulator’s efforts are intended to reduce procedural hurdles while maintaining the necessary regulatory safeguards.

The large number of responses to the CAS consultation highlights the level of interest among market participants in proposed changes to the trading and settlement framework. SEBI is expected to consider the feedback before finalising its approach. The regulator’s review comes as India’s capital markets continue to expand, with SEBI seeking to improve market infrastructure while addressing concerns raised by investors and other stakeholders.