Regulator Reviews CAS Feedback For Improvements
Key Highlights
- SEBI Chairman Tuhin Kanta Pandey said the Closing Auction Session (CAS) is here to stay.
- The CAS framework came into effect on August 3, 2026.
- SEBI is reviewing feedback and suggestions from market participants.
- The regulator is examining whether improvements can be made to address stakeholder concerns.
- Some participants have raised concerns about the framework, particularly on social media.
- SEBI believes some issues could reduce as participation in CAS increases.
- Some market participants are still operating on systems aligned with the older VWAP framework.
- SEBI has described CAS as a major reform for India’s capital markets.
Mumbai, August 17: Securities and Exchange Board of India (SEBI) Chairman Tuhin Kanta Pandey has made it clear that the recently introduced Closing Auction Session (CAS) framework is here to stay, while the regulator continues to examine feedback from market participants for possible improvements.
The CAS framework came into effect on August 3, 2026, and has since attracted feedback from various stakeholders, with some participants highlighting operational concerns and shortcomings.
Pandey said SEBI is analysing the suggestions and will consider changes wherever necessary.
CAS Framework To Continue
Speaking to reporters on the sidelines of a cybersecurity event organised at the SEBI-promoted National Institute of Securities Markets, Pandey said the Closing Auction Session would remain part of India’s market structure.
He said the regulator would examine whether there were specific constraints or issues that could be addressed through improvements to the framework.
However, Pandey did not immediately disclose what specific changes SEBI may consider.
The regulator’s approach indicates that the basic structure of CAS is not under reconsideration, although operational improvements could still be introduced.
SEBI Reviews Stakeholder Feedback
SEBI has been receiving suggestions from market participants following the introduction of the new system.
Pandey said SEBI teams had reviewed several suggestions, including feedback posted on social media, and were discussing the concerns with participants.
The regulator, however, does not intend to react to every individual criticism or suggestion.
Pandey said CAS represents a major reform in India’s capital markets and that SEBI is focused on achieving specific objectives through the new framework.
Participation Could Resolve Concerns
According to Pandey, some of the concerns surrounding CAS could disappear as participation in the system increases.
He also pointed out that several market participants are still using systems designed around the older volume-weighted average price (VWAP) framework.
As participants and their systems adjust to CAS, the benefits of the new framework could become more apparent, according to the SEBI chairman.
The transition from an established market mechanism to a new framework could therefore require participants to adapt their trading systems and processes.
Market Participants Need To Adapt
Pandey also questioned whether some market participants had invested enough effort in understanding the new system.
He noted that when a particular framework has been used for many years, market participants can become accustomed to it and may not immediately prepare for a significant change.
The introduction of CAS therefore requires participants to learn and adapt to a new trading mechanism rather than relying entirely on processes designed for the previous system.
Global Practices Cited
SEBI has previously pointed out that similar closing auction mechanisms are already used in other international markets.
Pandey has described India as a relatively late adopter of such a framework, suggesting that the move is intended to bring Indian market practices closer to established global mechanisms.
The regulator believes the system can contribute to a more structured closing process once market participants become familiar with it.
CAS Remains Major Market Reform
The introduction of the Closing Auction Session represents a significant change in the way India’s stock markets handle the closing phase of trading.
While concerns have emerged following its implementation, SEBI has indicated that it will focus on addressing genuine operational issues rather than reversing the framework.
Pandey also said SEBI had received congratulatory messages from several stakeholders following the introduction of CAS.
The regulator is now expected to continue reviewing market feedback while allowing participants more time to adapt to the new system.
