SEBI to Release New CAS Guidelines Within a Week
SEBI Chairman announces upcoming changes to Closing Auction Session rules aimed at reducing discretionary powers.
New CAS guidelines expected within a week, according to SEBI Chairman.
The revised framework will replace the old VWAP system with a 20-minute auction mechanism.
Consultation paper released to gather feedback on improving market liquidity and price discovery.
On Saturday, SEBI Chairman Tuhin Kanta Pandey announced that the new guidelines for the Closing Auction Session (CAS) are set to be released within a week. This development aims to streamline the auction process and reduce discretionary powers in the trading environment.
The CAS framework, which was initially introduced on August 3, replaces the previous 30-minute volume-weighted average price (VWAP) system with a more efficient 20-minute auction-based mechanism. This change is expected to enhance the determination of official closing prices for eligible stocks, thereby improving market integrity.
Pandey also indicated that guidelines regarding the responsible use of artificial intelligence and machine learning in trading practices will be forthcoming. He noted that a significant number of suggestions—approximately 3,500—have already been received regarding the CAS framework, reflecting a robust engagement from market participants.
In September, SEBI had published a consultation paper that sought to explore various aspects of the CAS framework. The paper outlined key proposals aimed at enhancing the interaction between cash-market auctions, derivatives trading, and settlement methodologies. The goal is to strengthen price discovery mechanisms, facilitate hedging and arbitrage activities, and improve overall market liquidity.
Looking ahead, SEBI's ongoing review of the CAS system will continue to incorporate feedback from stakeholders, including exchanges, trading members, and broker associations. The upcoming guidelines are anticipated to play a crucial role in refining the trading landscape, ensuring that market operations remain transparent and efficient.
