SEBI reviewing derivatives expiry settlement framework after CAS rollout: Chairman Pandey

New Delhi: Securities and Exchange Board of India (SEBI) Chairman Tuhin Kanta Pandey on Saturday said the regulator is examining concerns around the settlement price framework for derivatives on expiry days.

Speaking at the Commodity and Capital Market Participants Association of India’s (CPAI) 12th International Convention here, Pandey said India requires markets that can efficiently mobilise capital, manage risk and inspire trust among investors.

Following the introduction of the Closing Auction Session (CAS) mechanism, the market regulator is reviewing issues related to determining derivatives settlement prices on expiry days.

The CAS framework was introduced to improve end-of-day price discovery by matching buy and sell orders at a single equilibrium price rather than relying solely on volume-weighted average prices.

SEBI chairman said the regulator wants deeper and more liquid cash markets, stronger securities borrowing and lending mechanisms and more efficient hedging and arbitrage opportunities to enhance price discovery and strengthen the interaction between cash and derivatives segments.

In the commodity derivatives market, SEBI is examining position limits for non-agricultural contracts with the aim of improving liquidity and market depth without compromising risk management standards.

SEBI would continue engaging with stakeholders on Goods and Services Tax (GST)-related issues affecting participants engaged in commodity deliveries through exchange platforms, according to the Chairman Pandey.

Highlighting measures to broaden participation, he noted that foreign portfolio investors (FPIs) have been given access to non-agricultural commodity derivatives, a move expected to improve liquidity and price discovery while retaining safeguards for the physical market.

The SEBI chief also pointed to reforms aimed at simplifying capital markets, including concise and standardised prospectus disclosures for retail investors, measures to deepen the bond distribution ecosystem, greater flexibility for investors in corporate bonds, REITs and InvITs and the reintroduction of open-market share buybacks through stock exchanges.

Pandey said the regulator remains focused on building more efficient, inclusive and resilient markets that support investment, capital formation and risk management across the economy.

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