Tuhin Kanta Pandey, chairman of the Securities and Exchange Board of India, declared on Saturday that the regulator will move quickly to implement proposed changes to the Closing Auction Session (CAS). The decision follows the receipt of more than 3,500 comments on the consultation paper, which closed on October 3. Pandey emphasized that the proposals are "quite clear," signaling that the review process will not drag on.
"Today is the last date, and we will actually quickly look at all these comments and go ahead," Pandey stated at an event organized by the Commodity & Capital Market Participants Association of India (CPAI). He confirmed that a circular outlining the final changes is on the immediate horizon. The regulator had initially invited views on CAS modifications, market timings, and settlement methodologies for derivative contracts.
The review stems from concerns regarding how the CAS, introduced in the equity cash segment, impacts settlement prices for index and stock derivatives on expiry days. Sebi aims to resolve specific issues identified by market participants while allowing them to propose alternative approaches. The consultation was designed around a defined problem, ensuring the final framework addresses real-world trading friction.
Beyond the CAS overhaul, Pandey outlined Sebi’s strategy for developing the corporate bond derivatives market. He noted that growth relies on regulatory enablement, technical infrastructure, and broader market participation. The regulator has already launched an electronic bidding platform for primary issuances and strengthened the request-for-quote mechanism for secondary-market transactions. "Bond indices and derivatives will be, I would think, a major milestone going forward," he added.
On foreign portfolio investor (FPI) flows, Pandey stated that Sebi is focusing on easing onboarding and access to Indian markets. He acknowledged that while investment decisions depend on global returns, regulatory friction must be minimized. Sebi is working with the Reserve Bank of India to further simplify access, including allowing FPIs to participate in non-agricultural commodity derivatives. The next step involves the immediate issuance of the CAS circular, with bond market reforms rolling out in the coming months.