Neutral impactEconomy
SEBI could consider VWAP, tighter bands to address CAS concerns
BusinessLine 1 hr ago·8 Sept 2026, 3:25 pm
The Securities and Exchange Board of India (SEBI) is reviewing market structure rules to address concerns over the Core Settlement Account (CAS) and potential market manipulation. A key proposal involves extending the overlap period between derivatives trading and the cash market auction. This change aims to reduce the window for late orders that could distort price discovery during the settlement process.
This move matters to investors as it seeks to improve market integrity and reduce volatility. By tightening trading bands, SEBI aims to ensure that auction prices reflect genuine market demand and supply rather than artificial distortions. This could lead to a more stable and transparent trading environment for all market participants.
Investors should watch for the final SEBI circular, which is expected to be released soon. The implementation of these measures will likely impact intraday trading strategies and the overall liquidity in the cash market. Monitoring these developments will be crucial for understanding the future landscape of Indian equity markets.
Excerpt from BusinessLine
The Securities and Exchange Board of India (SEBI) could consider changes to the way derivatives are settled under the new closing auction session (CAS), including using a VWAP-based settlement price and tightening price bands, according to market sources. The concern is particularly acute on expiry days, when option…Read the original at BusinessLine
Key takeaways
- Category: Economy.
- Assessed as a significant, market-relevant update.
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