The Securities and Exchange Board of India (SEBI) will wait at least a year before considering further changes to the Closing Auction Session (CAS), the regulator's Whole-Time Member KVR Murty said in a telephonic interview with NDTV Profit, following the regulator's latest revision of the closing auction framework.
SEBI's revised rules, which take effect from December 7, change how exchanges calculate reference prices for the closing auction, restrict the types of orders traders can place during the session and specify new trading cut-offs for index and stock derivatives. The revisions follow feedback from market participants, including concerns about derivatives contracts on expiry days.
Murty said SEBI would give the revised framework time to operate before deciding whether further changes were necessary. The regulator remains open to reviewing the mechanism but will consult market participants before making additional revisions.
"We will wait and watch for at least a year," Murty said.
Market Feedback
SEBI received responses from around 20,000 participants and conducted two rounds of public consultation before finalising the revised framework, Murty said.
"We have got a lot of positive responses from participants," he said, adding that the regulator had taken market participants' suggestions seriously.
Participants had also highlighted issues with CAS, with contracts on expiry days being a particular concern. Murty said SEBI would continue to take feedback on board as the mechanism evolves.
The regulator would not make further changes without consulting market participants, he said.
READ | SEBI Revises CAS Timings; Revises Order Types, Timings And Settlement From Dec 7
CAS To Stay
Murty said SEBI viewed CAS as a positive development for the markets and expected the mechanism to remain in place.
"CAS is going to evolve on market feedback," he said, adding that the regulator aimed to adopt a balanced approach.
He also described CAS as a globally followed practice and expressed optimism about the revised framework.
SEBI will continue to assess the mechanism's functioning and consider further changes if needed, Murty said. The regulator's approach is to allow the revised rules to operate, gather feedback and consult stakeholders before making any further adjustments.
READ | BSE, Angel One Fall Over 3% On SEBI CAS Changes; MCX, Groww, NSE Also Decline
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