SEBI’s closing-auction consultation drew about 20,000 comments
The Securities and Exchange Board of India said about 20,000 comments had arrived by 3 October on its consultation covering the closing auction, market timings and derivatives settlement. That is well above the 3,500 responses its chairman described, and above the 6,000 comments a 2024 futures-and-options paper drew. He said a circular could be forthcoming and named no effective date. The paper, issued on 12 September, sets out alternatives rather than a rule already in force.
Economics & Markets··Midday
About 20,000 comments arrived by the deadline
Brajesh Kumar reported that SEBI had received around 20,000 comments by 3 October, the last day for feedback on the consultation covering the closing auction, market timings and derivatives settlement. That count sits well above the more than 3,500 responses chairman Tuhin Kanta Pandey described at an event of the Commodity and Capital Market Participants Association of India. SEBI said the 3,500 figure reflected a count from a few days earlier, and that the count by the deadline was about 20,000. Pandey said the regulator would examine the responses quickly and move ahead. He answered yes when asked whether a circular would come soon. He named no effective date.[1], [2]
The September consultation covers the closing auction, market timings and the way index and stock derivatives receive a settlement price on expiry days. The review followed the auction’s start in the equity cash market and concerns about derivatives settlement prices. Pandey described a particular problem, and participants can propose different solutions. He said clearly defined proposals help the regulator compile responses. The remarks leave the proposed changes as proposals. They are not a decision that every one of them has been adopted.[1], [2]
Two settlement designs are on the table
The consultation paper was issued on 12 September. The closing auction for futures and options stocks had started on 3 August. The new paper drew more than three times the 6,000 comments SEBI received in 2024 on a consultation about curbing excessive activity in futures and options. SEBI asked for views on seven proposals. For expiry-day settlement it offered two designs. The first design blends the volume-weighted average price of the last 30 minutes of continuous trading with the 10-minute closing auction. The second design keeps a continuous-session price at first, with a possible move to the blend after at least 1 year, and only after a review.[1]
The paper also sets out two alternative market-timing structures and changes to how an indicative index is shown during the closing auction. It proposes limits on cancelling certain limit orders placed beyond 1 percent of the reference price, and a treatment for unexecuted quantities of iceberg orders. Comments rose sharply toward the deadline. SEBI is expected to examine the feedback before a final view. The regulator has a software tool to analyse that feedback, including repetitive responses sent in large numbers. A high count records participation in the review. Participation is not the same thing as a decision to adopt one design.[1]
Bond-market measures sit beside the auction review
Pandey said corporate-bond derivatives need regulatory enablement, technical infrastructure and participation together. Among measures already in place he cited an electronic bidding platform for primary issuance, oversight of online bond platforms, and a request-for-quote mechanism for secondary trading. He said SEBI is working with the Reserve Bank of India to ease access for foreign portfolio investors. He separated easier entry from the choice an investor makes across countries. That choice, he said, follows returns and opportunities. Simplifying entry does not lock in a particular flow of capital. The comment count and these bond-market remarks are one account of the regulator’s agenda. Neither of them puts a closing-auction rule into force.[2]
