SEBI seeks expiry settlement tweak for index and stock derivatives
SEBI is looking to tweak how settlement prices are set for index and stock derivatives on expiry days, aiming to calm down market swings.
This comes after traders noticed more volatility since the Closing Auction Session (CAS) kicked off last August.
SEBI outlined its ideas in a consultation paper.
Two settlement options and trading curbs
They're considering two ways to calculate settlement prices: one mixes trades from the last 30 minutes of regular trading with the CAS, while the other skips CAS entirely for at least a year.
Other proposals include cutting post-CAS trading time to 5 minutes, preventing the cancelation of limit orders placed more than 1% above or below the reference price, and stopping live index hints during CAS.
If you have thoughts on these changes, SEBI is open to public feedback until October 3.