No manipulation observed in closing auction sessions: SEBI Chairman
SEBI chairman Tuhin Kanta Pandey on Wednesday said that the capital markets regulator has not observed any manipulations in the newly introduced closing auction sessions system.
Speaking on the sidelines of an event here, Pandey urged the broader ecosystem to understand the new system and adopt it. He said a lot of markets, including those in Australia, Europe, the US and Japan, have adopted a similar system for over two years and India is behind its counterparts.
He said such a system, which was started on August 3, is useful for passive investors, generation of the correct net asset values for mutual funds and index investors. The earlier system had the risk of manipulation with late trades, he added. When asked if the regulator has seen any manipulation in the new system, he said no manipulation has been observed.
“Basically, the CAS is a transparent market, the pricing there is always visible and participation should grow in it,” Pandey said, adding that SEBI is engaged with all the stakeholders to understand their feedback.
The Securities and Exchange Board of India (SEBI) is willing to tweak the system if need be, he said, adding that at present, our problem is with understanding the system.
Meanwhile, SEBI is mulling to come out with a new paper on its findings on the losses suffered by retail investors in the derivatives market in the next 8-10 days, according to Pandey.
He said some of the results will surprise the ecosystem and stressed that such strategies of executing trades on expiry days are not as simple as they are made out to be by some retail investors.
Earlier, speaking at the Global Commodity Conclave, Pandey said the growth in the market is encouraging, but the scale alone is not enough as India is a major producer and consumer of several commodities.
“Can that economic weight translate into greater influence over price discovery? Can we move from being price takers to becoming price makers?” the SEBI chairman asked.
The capital markets watchdog is examining wider foreign portfolio investor access to commodity indices and physically settled non-agri contracts through a calibrated framework, he said.
