Sebi to partly reverse derivative settlement rules after pushback: Report
Economic Times 1 hr ago·5 Oct 2026, 10:33 am
The Securities and Exchange Board of India (Sebi) is reportedly reconsidering its recent rule changes for derivative settlements. The regulator is expected to partially reverse its decision to use the closing auction mechanism for settling derivatives contracts. Instead, it plans to introduce a 30-minute volume-weighted average price (VWAP) calculation for a trial period of at least one year.
This shift is a direct response to the extreme price volatility observed during previous expiry days. By moving away from the auction method, Sebi aims to reduce sudden, sharp swings in stock prices. This change is significant for investors as it seeks to stabilize the market and ensure smoother settlement processes during high-volume trading periods.
Investors should monitor the official notification from Sebi once it is released. The new VWAP mechanism will be tested for a year, so market participants should observe how it impacts price discovery and volatility during the next series of expiries. Keeping an eye on liquidity levels will also be crucial to understanding the rule's effectiveness.
Key takeaways
- Category: Economy.
- Flagged as a high-impact, market-moving story.
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