Markets regulator SEBI is expected to issue guidelines on determining derivative settlement prices on expiry days within a week, following a review of the Closing Auction Session (CAS) mechanism, its chairman Tuhin Kanta Pandey said on Saturday.
The Securities and Exchange Board of India (SEBI) had sought public comments till October 3 on proposals to review certain aspects of the CAS mechanism, market timings and the settlement methodology for derivative contracts.
“Following review of the Closing Auction Session, a consultation paper was put out to address concerns in respect of the settlement price of derivatives on expiry day. We are currently examining the comments and hope to issue guidelines in about a week’s time,” Pandey said at an event organised by the BSE Brokers’ Forum.
SEBI had received around 20,000 comments on the consultation paper till 7 pm on October 3, 2026, the regulator had said in a post on X.
The CAS mechanism aims to determine closing prices through an auction process.
In September, SEBI proposed changes to the CAS framework and the methodology for determining settlement prices of index and stock derivatives on expiry days. The review followed the introduction of CAS in the equity cash segment and concerns over its impact on derivatives settlement prices.
Separately, Pandey said SEBI is reviewing the Depositories and Participants Regulations to simplify rules and strengthen fraud prevention. The regulator is also exploring a graded compliance framework for brokers based on their scale, client exposure and technology dependence.
“We are exploring graded compliance based on scale, client exposure and technology dependence. One size need not fit all,” he said.
SEBI is also addressing concerns over certain transactions, including tender offers, share buybacks and offers for sale, remaining outside the interoperability framework and requiring parallel clearing arrangements.
He added that implementation of the proposed changes is targeted for the end of November 2026.
The move is expected to improve capital efficiency and reduce compliance costs while maintaining settlement safety.
On easing access to Indian markets for overseas investors, Pandey said SEBI had consulted on simplifying digital onboarding for Persons Resident Outside India without requiring their physical presence. The regulator has received more than 400 comments on the proposal and will issue a circular shortly.
He also said SEBI is strengthening business continuity, disaster recovery, cybersecurity safeguards and governance across market infrastructure institutions.
The regulator will soon issue guidelines for the responsible use of artificial intelligence (AI) and machine learning, adopting a tiered approach with clear accountability, data controls, kill switches, and human oversight, Pandey said.