Neutral impactSector
SEBI’s CAS fix finds early favour for the old way of settling derivatives
BusinessLine 1 hr ago·13 Sept 2026, 3:27 pm
The Securities and Exchange Board of India (SEBI) is considering a major shift in how derivatives contracts are settled. Currently, exchanges use a blended Volume Weighted Average Price (VWAP) method. SEBI is now testing a new proposal to revert to the simpler 'one-year return' method, which calculates the final settlement price based on the asset's performance over the previous year. This change aims to simplify the process for market participants.
This shift matters to investors because the new method is expected to reduce volatility in the final settlement price. A simpler calculation could lower the risk of sudden price swings, making the market more predictable. It may also encourage more participation in the derivatives segment by removing complex calculation hurdles.
Traders and exchanges are closely watching this development. If SEBI approves the one-year return method, it could become the new standard for expiry settlements. Investors should monitor the regulator's final decision to understand how this might impact trading strategies and market stability.
Excerpt from BusinessLine
The Securities and Exchange Board of India’s (SEBI) proposed changes to the new closing auction session (CAS) are expected to make price discovery less disruptive and resolve many practical problems, but early reactions from market participants still suggest a preference for the more familiar system of using…Read the original at BusinessLine
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