SEBI Chief Says Closing Auction Session Will Stay as Liquidity Concerns Ease

Securities and Exchange Board of India (Sebi) Chairman Tuhin Kanta Pandey has indicated that the Closing Auction Session (CAS) will remain part of the Indian securities market framework. He acknowledged that liquidity may face pressure during the early stages of implementation but noted that similar concerns in international markets have eased as participants adapted to the system.

Speaking on the sidelines of the Global Fintech Fest, Pandey referred to experiences in markets such as the United States, Japan and Hong Kong, where liquidity conditions initially weakened following the introduction of closing auction mechanisms but subsequently improved.

Sebi is also expected to release a consultation paper on the CAS framework, which could provide further clarity on its implementation and operational aspects. While some market participants have supported CAS, particularly for facilitating orderly price discovery during events such as MSCI rebalancing, concerns remain among sections of the market regarding the impact of settlement-price dependence on liquidity and trading activity. CASansaar