- SEBI to issue guidelines on Closing Auction Session within a week to address derivatives concerns
- SEBI plans to include tender offers and buybacks in interoperability framework by November 2026
- New tiered AI and machine learning guidelines will include accountability and emergency shutdowns
The Securities and Exchange Board of India (SEBI) is expected to issue guidelines on the Closing Auction Session (CAS) within about a week to address concerns over derivatives settlement prices on expiry days.
SEBI Chairman Tuhin Kanta Pandey announced the timeline on Saturday at the second Capital Market Confluence 2026, organised by the Bombay Stock Exchange Brokers' Forum in Mumbai.
Pandey said the regulator was examining comments received on a consultation paper issued following a review of the CAS framework.
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The consultation paper seeks to address concerns over the settlement price of derivatives on expiry days. SEBI is yet to disclose the specific changes it plans to introduce.
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Interoperability Framework To Expand By November-End
Pandey also said SEBI was working to bring transactions such as tender offers, share buybacks and offers for sale within the interoperability framework for clearing corporations, with implementation targeted by the end of November 2026.
These transactions currently require parallel clearing arrangements, increasing costs and compliance requirements for market participants. Bringing them within the framework is expected to improve capital efficiency and reduce compliance costs while preserving settlement safeguards.
SEBI To Introduce Tiered AI And Machine Learning Framework
Separately, Pandey said SEBI would soon issue guidelines governing the responsible use of artificial intelligence (AI) and machine learning (ML). The proposed framework will follow a tiered approach, with provisions for clear accountability, data controls, emergency shutdown mechanisms or “kill switches”, and human oversight.
SEBI also plans to align its approach with the International Organization of Securities Commissions' (IOSCO) Supervisory Toolkit for AI to support an agile governance framework.
Pandey stressed that regulated entities would remain responsible for AI-driven outcomes, data quality, model governance and cybersecurity, even as technology becomes more deeply embedded in market operations.
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The regulator is also reviewing depository regulations and exploring graded compliance requirements for brokers based on their scale, client exposure and dependence on technology.
The measures form part of SEBI's broader effort to simplify regulation, improve market efficiency and strengthen investor protection.
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