SEBI Chairman Tuhin Kanta Pandey has said the regulator is carefully analysing issues raised about the new Closing Auction Session and will soon announce its view. He stressed that CAS is here to stay and that higher participation along with resolving current challenges will make the system more transparent and efficient in fixing closing prices.
CAS was introduced last week as a 20 minute auction where exchanges collect buy and sell orders to determine fair closing prices. It replaced the earlier average price method to ensure better execution for large trades. Some market participants flagged thinning participation and possible losses. Pandey clarified that CAS is permanent but tweaks may be made after studying the concerns. He added that indicative prices are vital for traders and SEBI is consulting stakeholders while monitoring feedback.
He noted discrepancies in Sensex and Nifty have already narrowed. Brokers are displaying indicative prices and more are expected to follow. The immediate challenge is lack of understanding and ease of participation rather than transparency. Trading algorithms built on the old system must adapt. Pandey concluded that CAS aims to provide fairer closing prices but requires time for participants to familiarise themselves.