SEBI to Release CAS Guidelines Within a Week, Says Chairman
Tuhin Kanta Pandey announces upcoming guidelines for the closing auction session aimed at enhancing market efficiency.
SEBI plans to issue guidelines on closing auction sessions in a week.
The regulator is focusing on improving cash market liquidity and price discovery.
New regulations will address digital onboarding and the use of AI in market operations.
The Securities and Exchange Board of India (SEBI) is set to unveil new guidelines regarding the closing auction session (CAS) within a week, as stated by Chairman Tuhin Kanta Pandey during an event hosted by the BSE Brokers’ Forum in Mumbai. This announcement comes as SEBI reviews feedback from a consultation paper aimed at addressing issues related to the settlement price of derivatives on expiry days.
In his address, Pandey emphasized SEBI's commitment to enhancing the Indian securities markets over the next decade. He highlighted the importance of deepening cash markets and improving price discovery mechanisms. According to him, fostering wider participation, strengthening securities borrowing and lending, and enhancing hedging and arbitrage practices are crucial steps towards improving market liquidity and efficiency.
Pandey also mentioned that SEBI is currently reviewing regulations that govern depositories and their participants, with the goal of simplifying existing rules and bolstering fraud prevention measures. For brokerage firms, the regulator is considering a tiered compliance framework that would vary based on the scale of operations, client exposure, and technological reliance.
Additionally, SEBI is addressing challenges related to transactions such as tender offers and buybacks that fall outside the interoperability framework. These transactions necessitate parallel clearing arrangements, which can increase costs and compliance burdens. The implementation of these regulatory changes is targeted for completion by the end of November 2026.
Looking ahead, SEBI is set to issue guidelines on the responsible use of artificial intelligence and machine learning in market operations. These guidelines will incorporate a tiered approach, ensuring accountability, data control, and human oversight. Furthermore, SEBI is enhancing its focus on investor education, aiming to extend outreach to universities and colleges nationwide, with the expectation that brokers and intermediaries will actively participate in this initiative.
