SEBI sees no manipulation in stock closing auction: Chairman Tuhin Kanta Pandey

The Securities and Exchange Board of India (SEBI) has stated that it has not identified any manipulation in the recently introduced closing auction system, according to its chairman, Tuhin Kanta Pandey. The closing auction is a significant market structure reform aimed at aligning with global standards, as Pandey mentioned during an event in Mumbai.

The chairman further indicated that SEBI is actively seeking ways to enhance participation in the new system. The closing auction is a distinct 20-minute session, launched last week, where exchanges gather buy and sell orders to establish a stock's closing price at the point where maximum volume can be executed. This mechanism replaces the previous method of calculating the closing price based on the average price of trades in the final 30 minutes of regular trading.

The main objective of this reform is to ensure a fairer and more transparent closing price, improve execution efficiency for large orders, and reduce tracking error for passive funds. So far, mutual fund participation in the new system has increased from approximately 5%-6% on the first day to around 20%-25% since then, as reported by the regulator.