The Securities and Exchange Board of India is expected to issue guidelines on determining derivative settlement prices on expiry days within a week, following a review of the Closing Auction Session mechanism, chairman Tuhin Kanta Pandey said on Saturday.
SEBI had invited public comments until October 3 on proposals to review aspects of the CAS mechanism, market timings and the methodology used to settle derivative contracts. Speaking at an event organised by the BSE Brokers' Forum, Pandey said the regulator was examining the feedback received on its consultation paper and expected to issue the guidelines within about a week.
The paper was released to address concerns regarding the settlement price of derivatives on expiry days. SEBI received around 20,000 comments on the consultation paper by 7 pm on October 3, 2026, the regulator said in a post on X. The CAS mechanism determines closing prices through an auction process.
In September, SEBI proposed changes to the framework and the methodology for calculating settlement prices for index and stock derivatives on expiry days. The review followed the introduction of CAS in the equity cash segment and concerns about its impact on derivatives settlement prices.
Separately, SEBI is reviewing the Depositories and Participants Regulations to simplify requirements and strengthen fraud prevention. It is also considering a graded compliance framework for brokers, with obligations tailored to their scale, client exposure and dependence on technology.“We are exploring graded compliance based on scale, client exposure and technology dependence.
One size need not fit all,” Pandey said. The regulator is also examining arrangements for tender offers, share buybacks and offers for sale that fall outside the interoperability framework and require parallel clearing arrangements. Pandey said implementation of the proposed changes was targeted for the end of November 2026.
The changes are expected to improve capital efficiency and lower compliance costs while maintaining settlement safety. To ease overseas investors' access to Indian markets, SEBI has consulted on simplifying digital onboarding for Persons Resident Outside India without requiring them to be physically present.
The proposal has received more than 400 comments, and the regulator will issue a circular shortly, Pandey said. SEBI is also strengthening business continuity and disaster recovery arrangements, cybersecurity safeguards and governance across market infrastructure institutions.
The regulator will soon issue guidelines on the responsible use of artificial intelligence and machine learning. The proposed framework will adopt a tiered approach with clear accountability, data controls, kill switches and human oversight, Pandey said.