SEBI Chair Defends New CAS; Says It Can Help Curb Market Manipulation

SEBI’s closing auction session (CAS) is a major market microstructure reform aimed at making closing prices more transparent and reducing the scope for manipulation. In this conversation, SEBI’s perspective on CAS, indicative prices, random closing, passive investing and tracking errors is discussed in detail. The discussion also covers how broker participation is evolving, the rise in mutual fund participation, the role of prop traders and the need for market participants to better understand the new system. SEBI is closely monitoring the data and remains open to suggestions and possible tweaks as the market adapts to the new mechanism.