SEBI proposes overhaul of derivatives closing auction after sharp price swings
· Business · Bloomberg, LiveMint
The Securities and Exchange Board of India has released a consultation paper proposing changes to the closing auction mechanism for derivatives. This move follows several instances of sharp price swings and concentrated activity since the system was recently introduced. The proposed overhaul aims to refine how settlement prices are determined to ensure market stability. Market participants had previously raised concerns regarding the volatility observed under the current framework.
Why it matters
The changes seek to prevent extreme volatility and price manipulation in the derivatives market, which directly impacts retail traders and institutional investors.
Read the original report — Bloomberg
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