SEBI's SMAC Meeting on CAS Framework Scheduled for Thursday

The Securities and Exchange Board of India (SEBI) has scheduled a meeting of its Secondary Market Advisory Committee (SMAC) for Thursday to evaluate feedback on the closing auction session (CAS) framework. This meeting aims to address the responses received on SEBI's consultation paper regarding CAS, as confirmed by multiple sources familiar with the situation.

The agenda for the meeting is primarily centered around the feedback from the consultation paper, which was released on September 12 and closed for comments on October 3. While SEBI has not disclosed a detailed agenda, insiders suggest that the regulator prefers to keep its considerations open, relying on public and stakeholder input to shape its policy decisions.

Market participants have expressed a preference for maintaining the current volume-weighted average price (VWAP) methodology for calculating derivatives settlement prices. This approach contrasts with a proposed blended methodology that would incorporate prices from the closing auction session. The outcome of Thursday's discussions is anticipated to influence SEBI's final decision on whether to retain the existing mechanism temporarily or implement the proposed changes.

The CAS was introduced for stocks in the derivatives segment on August 3, 2026, with the goal of enhancing the discovery of closing prices. However, its implementation has raised concerns regarding potential price volatility during auctions and the effects of auction-derived prices on derivatives settlements. SEBI has received approximately 20,000 comments on its consultation paper, indicating significant stakeholder engagement on this issue.

Looking ahead, SEBI Chairman Tuhin Kanta Pandey indicated that the regulator aims to finalize the CAS framework shortly after the SMAC meeting. The timing and specifics of the new methodology will depend on the outcomes of the discussions and stakeholder feedback, with a circular expected to follow soon after the meeting.