SEBI to Review Derivatives Settlement Price Methodology Amid CAS Concerns
· Business · LiveMint, Times of India
The Securities and Exchange Board of India (SEBI) will issue a consultation paper on Saturday to refine the settlement price methodology for derivative contracts, addressing concerns raised by the Closing Auction Session (CAS). The review follows sharp price swings in headline indices on expiry days after CAS was introduced in August, affecting market participants including stock exchanges, brokers, and mutual funds. SEBI Chairman Tuhin Kanta Pandey confirmed CAS will remain in place but acknowledged issues with the current settlement price determination. The regulator has engaged extensively with market stakeholders to gather feedback and ensure transparency in price discovery. The consultation aims to address volatility and improve market practices for derivative contracts, particularly for cash-market stocks with derivatives.
Why it matters
The proposed changes to derivatives settlement methodology could significantly impact traders, investors, and financial institutions operating in India’s derivatives market. Clarity and stability in settlement prices are critical for risk management and market confidence, particularly during high-volatility periods like expiry days.
Read the original report — LiveMint
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