Former BJP MP Kirit Somaiya seeks SEBI probe into sharp Sensex swing during CAS
Former BJP MP Kirit Somaiya has urged SEBI to investigate the sharp swings in the Sensex during the Closing Auction Session on August 27, when the index plunged over 2,000 points within minutes before recovering much of the loss. He questioned whether the new CAS mechanism, introduced on August 3, has weaknesses related to liquidity and price discovery.
Former Member of Parliament Kirit Somaiya has called on the Securities and Exchange Board of India (SEBI) to investigate sharp fluctuations in the Sensex during the Closing Auction Session (CAS) on August 27. The Sensex dropped more than 2,000 points within minutes, falling from around 77,200 to nearly 74,983. Somaiya questioned whether this volatility indicated a weakness in the CAS mechanism and requested an inquiry and action.
He also suggested that the move might be linked to an attempt to undermine the CAS implementation, and warned that if true, it could be harmful to the system's health. Somaiya's concerns stem from liquidity issues after 3:15 pm, when there appears to be insufficient depth in the market, causing volatility. He proposed temporarily suspending CAS and redesigning it to address liquidity, price discovery, and the relationship between the cash and derivatives markets.
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