SEBI Chairman Tuhin Kanta Pandey during the Global Commodity Conclave 2026 in Mumbai on Wednesday
The Securities and Exchange Board of India (SEBI) has so far not observed any manipulation in the new closing auction session (CAS), Chairman Tuhin Kanta Pandey said on Wednesday.
Speaking at the sidelines of MCX Global Commodity Conclave, Pandey said, “We are constantly looking at our data. You can see that mutual fund participation was 5-7 per cent earlier. In between, it has increased to almost 25 per cent.”
CAS is a very big microstructure reform and a transparent market as its pricing is always visible, he said. “A lot of things are positive. But whenever there is a change, it takes time to prepare the whole industry for that change.”
The closing auction replaced the earlier volume-weighted average price (VWAP) mechanism for determining closing prices. Under CAS, buy and sell orders are consolidated to arrive at a single closing price, with indicative prices displayed during the session and a random close to reduce the scope for last-minute order placement to influence the price.
SEBI has been working with brokers and market participants to improve understanding of the mechanism. The regulator is also monitoring feedback and would consider tweaks if necessary, Pandey said.
The key issue at present was participation and the effectiveness of displaying indicative prices, rather than a structural problem with CAS. Pandey said several large brokers have started displaying indicative prices on their websites, with more expected to make them available on their apps by Friday.
In his address at the conclave, Pandey said the regulator was examining wider access for foreign portfolio investors (FPIs) to commodity indices and physically settled non-agricultural commodity contracts through a calibrated framework.
The move is aimed at broadening the participant base, as a deeper mix of commercial and institutional participants could improve liquidity, price discovery and the effectiveness of hedging.
In commodities, SEBI is also engaging with the GST Council on an IGST-based framework for warehousing commodities delivered through exchanges, instead of requiring separate registrations across States. Pandey said such a framework could make delivery-based contracts easier to execute.
SEBI is also preparing a detailed paper on derivatives trading, including the nature of losses across different categories of participants. Pandey said the paper is expected in the next 8-10 days.
The regulator's other priorities include streamlining position-limit and margin frameworks, completing guidelines on position limits for agri-commodities, strengthening physical settlement and expanding participation by farmers and farmer producer organisations.
Copyright© 2026, THG PUBLISHING PVT LTD. or its affiliated companies. All rights reserved.
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.
Source: Read the original article on www.thehindubusinessline.com