Now Reading: No manipulation in closing auction so far: SEBI chairman
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No manipulation in closing auction so far: SEBI chairman
SEBI Chairman Tuhin Kanta Pandey said on Wednesday that the regulator has not observed any manipulation in the new closing auction session (CAS) for determining stock closing prices. Speaking at a Mumbai…
The Story in Brief
SEBI Chairman Tuhin Kanta Pandey said on Wednesday that the regulator has not observed any manipulation in the new closing auction session (CAS) for determining stock closing prices. Speaking at a Mumbai event, Pandey called CAS a major market structure reform and said participation is rising, with mutual funds increasing their share from 5-7% to nearly 25%.
However, NDTV Profit reports that SEBI is separately reviewing the first week of CAS trading for possible market manipulation and examining whether low liquidity could make the closing auction vulnerable to price influence. Pandey acknowledged the previous VWAP system had a flaw that allowed a single small trade to disproportionately impact prices. He said SEBI is consulting stakeholders and may tweak the framework if needed.
The Indian Opinion
Some market voices have already called the closing auction a failure, citing low volumes and the August 3 discrepancy. That is premature. Mutual fund participation has jumped from 5-7% to 25% in days. The old VWAP system had a known flaw, SEBI admits it. The real test is not the first week’s teething trouble but whether brokers widely display indicative prices and whether participation keeps rising. If volumes stay thin after a month, the question will shift from manipulation risk to design adequacy. Watch Friday’s broker app rollout.
Sources (3): ndtvprofit.com, timesnownews.com, thehindubusinessline.com
This story was synthesised by AI from the 3 sources linked above.
Updated: this story now draws on 3 sources.
