New Delhi, October 3 (Daily Kiran) : The chairman of the Securities and Exchange Board of India (SEBI), Tuhin Kanta Pandey, announced on Saturday that the regulator is currently reviewing concerns related to the derivatives expiry settlement framework.
Speaking at the 12th International Convention of the Commodity and Capital Market Participants Association of India in the national capital, Pandey emphasized the need for markets that can efficiently raise capital, manage risks, and instill confidence among investors.
Following the implementation of the Closing Auction Session (CAS) framework, SEBI is examining issues related to price determination for derivatives settlements on expiry days. The CAS framework was introduced to improve price discovery by matching buy and sell orders at a single equilibrium price, rather than relying solely on volume-weighted average prices.
Pandey stated that SEBI aims to deepen and enhance liquidity in the cash market. The regulator is also focused on establishing a robust system for securities lending and borrowing, alongside improving hedging and arbitrage opportunities. These efforts are intended to enhance the price discovery process and strengthen the coordination between cash and derivatives segments.
In the commodity derivatives market, SEBI is reviewing position limits for non-agricultural contracts. This review aims to increase liquidity and market depth without compromising risk management standards.
According to Pandey, discussions with stakeholders regarding the Goods and Services Tax (GST) issues affecting participants involved in commodity delivery through exchange platforms will continue.
Highlighting measures to increase participation, he noted that Foreign Portfolio Investors (FPIs) have been granted access to non-agricultural commodity derivatives. This move is expected to enhance liquidity and improve price discovery while maintaining safeguards for the physical market.
Pandey also outlined reforms aimed at simplifying the capital market, including brief and standardized prospectus disclosures for retail investors, strengthening the bond distribution ecosystem, and providing greater flexibility for investors in corporate bonds, REITs, and InvITs. Additionally, he mentioned the resumption of open-market share buybacks through stock exchanges.
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