Countries including the US, Japan and Hong Kong also faced low liquidity when they introduced closing auction sessions (CAS), but liquidity recovered over time, Securities and Exchange Board of India (Sebi) chief Tuhin Kanta Pandey said on Thursday.
“Many market participants have told us about rollout of CAS in all jurisdictions including US, Japan, Hong Kong and they have told that initially, everywhere, wherever CAS was brought in, liquidity was always an issue. It builds up over time,” Pandey said on the sidelines of the Global Fintech Fest 2026.
The comments come as India’s market regulator looks to tweak the CAS framework to improve price discovery for the derivatives market on expiry days.
On 3 September, Sebi said it would issue a consultation paper to review how settlement prices for derivative contracts are determined, following industry feedback on the impact of CAS on expiry-day pricing.
The framework, introduced on 3 August, has faced low participation and thin liquidity during the last 15 minutes of trading, keeping several market participants from using the mechanism.