SEBI confirms CAS permanence, warns against manipulation

Securities and Exchange Board of India Chairman Tuhin Kanta Pandey has issued a stern warning that any attempt to manipulate the newly introduced Closing Auction Session system will face strict and immediate regulatory action. Pandey emphasized that the system, which was implemented on August 3 to enhance price transparency, is a permanent market structure and will not be reversed, despite initial implementation challenges and concerns from some market participants.

The CAS was introduced to replace the older volume-weighted average price method for determining official closing prices, aligning India's practices with major global markets. Under the new framework, buy and sell orders are pooled in a designated auction window at the end of the trading day, with all matched orders executed at a single calculated price. This aims to provide a cleaner closing price for stocks, mutual fund NAVs, index calculations, and derivatives settlement.

Since its launch, traders and other participants have reported unusual price moves and significant gaps between pre-auction price levels and final settlements, particularly in the initial days. Pandey acknowledged these as "teething troubles"...