SEBI’s advisory committee meets on October 15, 2026, to decide the future of the Closing Auction Session (CAS) for derivatives settlement. The meeting follows feedback from over 20,000 stakeholders, with regulators evaluating whether to retain the new system or return to older pricing methods.
The Securities and Exchange Board of India (SEBI) has scheduled a meeting of its Secondary Market Advisory Committee (SMAC) for Thursday, October 15, 2026. The primary agenda for this meeting is to deliberate on the future of the Closing Auction Session (CAS) framework, particularly concerning how derivatives are settled on expiry days.
This meeting is a response to intense feedback from the market. After SEBI introduced the CAS mechanism for stocks with Futures and Options (F&O) contracts on August 3, 2026, it invited public comments on its operational impact. The regulator received approximately 20,000 responses by the early October deadline, highlighting the significance of the issue for traders, brokers, and institutional investors.
Market participants have expressed concerns that the current CAS mechanism, which relies on auction-based price discovery, may lead to increased volatility during derivatives settlement. Many traders have advocated for a return to the previous methodology, which utilized a 30-minute volume-weighted average price (VWAP). The industry argument is that the older VWAP method provides more stable pricing for settling F&O contracts compared to the newer auction-based system.
SEBI Chairman Tuhin Kanta Pandey recently indicated that the regulator is reviewing these submissions and expects to issue final guidelines by mid-October 2026. The committee's discussion will be crucial in determining whether SEBI proceeds with the current framework, reverts to the previous VWAP calculation, or implements a hybrid model that blends both systems.
For investors and traders, this decision carries operational importance. Uncertainty regarding settlement pricing can impact how hedging strategies are executed and how derivatives portfolios are valued at the end of the trading day. Market participants are waiting for the circular that will clarify the settlement rules going forward.
The next step for the market will be the official announcement from SEBI following the SMAC deliberations. Investors and market entities should track upcoming exchange circulars for the finalized framework, which will dictate the standard operating procedure for derivative settlement on expiry days.