Sebi to Release New CAS Guidelines Within a Week
Sebi chairman Tuhin Kanta Pandey announces forthcoming guidelines on settlement prices for derivatives.
Sebi plans to issue guidelines on settlement-price mechanisms within a week.
The review aims to enhance India's cash markets and improve price discovery.
Sebi is also focusing on simplifying regulations and enhancing technological resilience.
Sebi chairman Tuhin Kanta Pandey announced on Saturday that the Securities and Exchange Board of India (Sebi) is set to release new guidelines regarding the settlement-price mechanism for derivatives on expiry days within a week. This announcement was made during the second Capital Market Confluence 2026, hosted by the Bombay Stock Exchange Brokers’ Forum in Mumbai. The guidelines are part of Sebi's ongoing efforts to strengthen India's cash markets and improve overall market efficiency.
The review of the Closing Auction Session (CAS) is a critical component of Sebi's strategy to enhance market functionality. Pandey emphasized that the regulator is currently analyzing feedback from a consultation paper aimed at addressing concerns related to the settlement price of derivatives. He noted that increased participation and improved securities borrowing and lending practices could significantly boost liquidity in cash markets.
In his address, Pandey outlined four primary objectives for Sebi: implementing proportionate regulation, developing deeper cash markets, facilitating easier access to Indian markets, and enhancing technological resilience. He mentioned that Sebi is also reviewing existing regulations concerning depositories and participants to simplify compliance and enhance fraud prevention measures.
The regulator's initiatives include addressing interoperability gaps in transactions such as tender offers and buybacks, which currently incur additional costs due to parallel clearing arrangements. The proposed changes are expected to be implemented by the end of November 2026, aiming to improve capital efficiency while maintaining settlement safety.
Looking ahead, Sebi is working on simplifying digital onboarding processes for Persons Resident Outside India (PROIs), allowing for easier access without physical presence. Additionally, guidelines for the responsible use of artificial intelligence and machine learning in financial markets will be released soon, focusing on accountability and data controls. Pandey concluded by highlighting the importance of trust in market operations, urging intermediaries to prioritize investor confidence.
