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Informist, Wednesday, Aug. 12, 2026

--SEBI Chair: Not seen manipulation so far via new norms for closing price 

--CONTEXT: SEBI Chair Tuhin Kanta Pandey speaking at sidelines of an event 

--SEBI Chair: Need to up mkt participation via new norms for closing price 

--SEBI Chair:Assessing feedback on new close price norms, may tweak if needed 

MUMBAI – Securities and Exchange Board of India Chairman Tuhin Kanta Pandey said the regulator has not observed any manipulation so far under the new mechanism for determining the closing price, while emphasising the need to increase market participation and understanding of the revised framework.

Speaking on the sidelines of the Global Commodity Conclave on Wednesday, Pandey said SEBI was continuously monitoring data following the transition to the new closing price mechanism and was assessing feedback from market participants. The regulator could tweak the framework if required, he said. "No, we haven't done it yet. But we are constantly looking at our data," Pandey said when asked whether SEBI had observed manipulation during the transition.

The new closing price mechanism is a significant market microstructure reform aimed at addressing concerns associated with the earlier volume-weighted average price system. Pandey said the earlier methodology could allow a small trade near the close to disproportionately influence the closing price, creating scope for manipulation.

Under the new mechanism, indicative prices are displayed during the closing process, while a random closing time has been incorporated to reduce the possibility of participants placing large orders at the last moment in an attempt to influence the final price.

Pandey said the immediate challenge was not the transparency of the mechanism but lack of understanding and ease of participation. He said market participants needed time to familiarise themselves with the new process and for trading algorithms and systems built around the earlier methodology to adapt. Several brokers had already started displaying indicative prices on their websites, with more large brokers expected to make the information available through their apps. This, he said, should help improve participation in the closing auction system.

He also said the SEBI was taking feedback from market participants as well as monitoring discussions on social media. If necessary, the regulator would consider changes to improve the mechanism. "We are also seeing it in social media. If there is any need, we will see if we can tweak it and improve it," he said, while adding that the current issue was largely a lack of understanding and ease of use.

The SEBI chairman also pointed to changes in participation patterns since the new mechanism was introduced. Mutual fund participation, which had earlier been around 5-7%, had at one point risen to nearly 25%, he said, although proprietary traders continued to have a higher presence on expiry days. Pandey said SEBI was in regular dialogue with market participants and welcomed suggestions on the new framework. "We have to be watchful. But we should be persistent. We should see that everyone understands the market," he said.

Separately, Pandey said SEBI would shortly release a detailed paper on measures aimed at addressing retail investor losses in derivatives. The paper, expected within 8-10 days, will provide a more granular assessment of the participants incurring losses, including investors beyond retail traders, he said. "Losses and profits are market risks that people have to take," Pandey said.

On commodity markets, Pandey said SEBI had sent proposals to the GST Council Secretariat seeking a shift to an integrated GST model for warehousing related to commodity deliveries. The proposal would allow warehousing across states without requiring separate registrations in each state, he said. SEBI will continue engaging with the GST Council and exchanges on the issue, Pandey said, noting that a more practical tax framework could make delivery-based commodity contracts easier to execute.

On broader measures to increase foreign portfolio investor participation, Pandey said SEBI was working to reduce friction in areas such as registration, block deal frameworks and netting. Tax-related issues concerning FPIs, however, fall within the remit of the central government, he said.  End

Reported by Kabir Sharma

Edited by Akul Nishant Akhoury

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