Sebi Proposes Changes to Expiry-Day Trading and Settlement Prices

The Securities and Exchange Board of India (Sebi) has proposed two options for determining expiry-day settlement prices for index and stock derivatives. The regulator is also exploring changes to the timing of the continuous trading session (CTS) and CAS and derivatives trading. Additionally, Sebi aims to introduce additional measures to improve the functioning of the auction. The proposed changes are aimed at reducing volatility and improving market liquidity. The regulator has set a deadline of March 31, 2024, for market participants to provide feedback on the proposed changes. Market experts say the changes could have a significant impact on the market, particularly in the context of the recent market volatility. The proposed changes include a hybrid model, which would combine elements of the current market makers model with a new system that uses algorithms to determine prices. The hybrid model is expected to reduce volatility and improve market liquidity. Sebi has also proposed introducing a new system for pricing derivatives, which would use a weighted average of prices from multiple exchanges. The new system is expected to improve market efficiency and reduce costs. The regulator has consulted with market participants and industry experts to develop the proposed changes. The proposed changes are expected to come into effect in phases, with the first phase set to begin in April 2024. The Securities and Exchange Board of India (Sebi) has proposed two options for determining expiry-day settlement prices for index and stock derivatives, changes to the timing of the continuous trading session (CTS) and CAS and derivatives trading, and additional measures aimed at improving the functioning of the auction.