Pandey: CAS auction system under review due to trader concerns

Why in news

SEBI is reviewing the Closing Auction System (CAS) for approximately 200 stocks following feedback from traders regarding its functionality.

Background

The CAS was introduced on August 3 to determine the closing prices of around 200 stocks through an auction process. SEBI is currently analyzing trader feedback to determine if structural changes are required.

Facts for Prelims

• S&TCAS: A mechanism used by SEBI to determine the closing prices of specific stocks through an auction process.
• BodySEBI: The primary regulator of the securities and capital markets in India.
• FactThe CAS currently applies to approximately 200 stocks.

For Mains

Q. Discuss the importance of transparent price discovery mechanisms in capital markets and the role of SEBI in ensuring market integrity.

Dimensions to cover in your answer

• market liquidity
• price discovery mechanism
• investor protection
• regulatory oversight

Keywords: price discovery · market integrity · regulatory review · transparency · capital markets

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