SEBI to Release CAS Guidelines Within a Week, Says Chairman
Tuhin Kanta Pandey announces upcoming changes to CAS and AI regulations at BSE Brokers’ Forum.
SEBI plans to issue guidelines on closing auction sessions within a week.
The regulator is reviewing broker compliance regulations based on size and technology use.
AI guidelines focusing on responsible use and cybersecurity measures are also forthcoming.
The Securities and Exchange Board of India (SEBI) is set to unveil new guidelines regarding the closing auction session (CAS) within the next week, as stated by chairman Tuhin Kanta Pandey during an event hosted by the BSE Brokers’ Forum in Mumbai. This initiative comes in response to feedback on a consultation paper that addresses concerns related to the settlement price of derivatives on expiry days.
The proposed modifications to the CAS aim to enhance the settlement price process for derivatives, particularly on expiry days. SEBI has actively sought input from stakeholders to refine this process. Pandey emphasized the importance of these changes, indicating that they are crucial for improving market efficiency and liquidity.
In addition to the CAS guidelines, SEBI is reviewing existing regulations governing depositories and brokers. The aim is to simplify compliance rules while enhancing fraud prevention measures. For brokers, a new compliance framework is being considered that would vary according to the broker's size, client exposure, and reliance on technology, ensuring that compliance requirements are proportional to their operations.
SEBI is also addressing broader issues related to transactions that fall outside the interoperability framework, such as tender offers and buybacks. These transactions currently necessitate separate clearing arrangements, which can inflate costs and compliance burdens. The implementation of proposed changes is expected to be completed by the end of November 2026.
Furthermore, SEBI is prioritizing the establishment of guidelines for the responsible use of artificial intelligence (AI) and machine learning (ML). These guidelines will incorporate a tiered approach that emphasizes accountability, data management, and human oversight. The regulator is also focused on enhancing cybersecurity measures and ensuring robust governance across market infrastructure. Pandey reiterated the importance of investor education, aiming to extend outreach to universities and colleges, and called for active participation from brokers and market intermediaries in this endeavor.
