SEBI Chief Tuhin Kanta Pandey Says Closing Auction Session Is Here to Stay, Tweaks Possible

On August 17, SEBI Chairman Tuhin Kanta Pandey affirmed that the Closing Auction Session (CAS) will likely remain in place despite recent concerns. Pandey stated that SEBI is reviewing feedback from market participants and may consider adjustments after identifying specific issues. He stressed the importance of improving participation and addressing existing concerns for the system to function effectively.

The CAS, a 20-minute trading session launched last week, determines the final price of stocks by collecting buy and sell orders. This system replaced the previous method of calculating closing prices using the average of trades conducted during the last 30 minutes of regular trading. While intended to enhance transparency and execution, especially for large orders, the CAS has faced criticism over participation and potential losses.

Pandey noted SEBI would examine concerns related to the portfolio management services segment and stated that the regulator is consulting various stakeholders and monitoring feedback through social media discussions. The primary challenges with CAS include the difficulty some participants face in adapting to the new mechanism and the availability of indicative prices, which are crucial for trading.

SEBI is continuing to monitor the mechanism and assess feedback, suggesting that initial concerns may diminish as participants grow more accustomed to the CAS.