For much of the first week of trading under the new auction system to set closing stock prices, traders were convinced that one of the most consequen tial market structure reforms in years was faltering. As calls grew louder for the mechanism to be rolled back, the markets regulator met with some of the nation’s top stock brokerages and delivered a clear message: the Closing Auction Session (CAS) is here to stay. Senior officials at the Securities and Exchange Board of India (Sebi), including board member K. V. R. Murty, told market players the new system is just facing teething issues in its early days and that the regulator remains con fident that it will improve as participation rises, according to people familiar with the discussions, who asked not to be iden tified because the talks were private.
The discussions came after the first two trading sessions—including last Tuesday’s expiry on the National Stock Exchange (NSE)—under the new system produced unexpected swings that led to market-wide confusion. Brokerages were fielding questions from clients, while re tail investors took to social media as they struggled to understand why official clos ing prices appeared disconnected from the day’s trading.
