SEBI Chief Says India’s CAS Liquidity Issues Mirror Global Trends
· Business · LiveMint, Economic Times
Securities and Exchange Board of India (SEBI) chief Tuhin Kanta Pandey stated that India’s liquidity concerns with Closing Auction Sessions (CAS) are not unique, as similar issues arose in the US, Japan, and Hong Kong when they introduced CAS. Pandey noted that liquidity problems were initially observed globally but improved over time. SEBI is reviewing the CAS framework to enhance price discovery for derivatives on expiry days, following feedback on its impact. The framework, launched on 3 August, has faced low participation and thin liquidity in the last 15 minutes of trading. SEBI plans to issue a consultation paper to refine settlement price determination for derivative contracts, potentially revisiting the volume-weighted average price (VWAP) model.
Why it matters
Market participants and traders in India’s derivatives market will be directly impacted as SEBI seeks to address liquidity concerns and improve pricing mechanisms. The changes could influence trading strategies and market stability for stakeholders relying on derivatives for risk management.
Read the original report — LiveMint
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