New Delhi/Mumbai 19 August (H.S.): Securities and Exchange Board of India (SEBI) Chairman Tuhin Kanta Pandey on Wednesday issued a stern warning to market participants, saying that any attempt to discredit or manipulate the Closing Auction Session (CAS) would be dealt with swiftly and strictly.

Speaking to reporters on the sidelines of an event organised by industry body FICCI, SEBI Chairman Tuhin Kanta Pandey said the regulator could detect manipulation in the CAS relatively easily. “We can detect manipulation in CAS relatively easily. CAS is meant for transparency. If anyone thinks they can manipulate CAS to discredit this new system, they will be in trouble,” he said.

Pandey warned that the capital market regulator would take stringent action against any attempt to “discredit” the Closing Auction Session, the mechanism used to determine the final price of a stock after regular market trading ends. Amid various concerns raised by market participants following the implementation of CAS on August 3, Pandey said SEBI’s ability to detect manipulation under the new system was greater than under the earlier Volume Weighted Average Price (VWAP) mechanism, which CAS has replaced.

The SEBI chief said participation in the CAS mechanism was increasing, specifically noting its growing adoption by mutual funds and proprietary traders. “I think participation in CAS is improving and will improve further. We are looking at the barriers to participation,” Pandey said.

SEBI introduced the CAS mechanism to curb market manipulation and enhance transparency. Under the system, buy and sell orders placed during a specified period before the close of trading are accumulated rather than being executed immediately and are subsequently matched through an auction-based order-matching process.

According to SEBI, major markets around the world have adopted mechanisms similar to the CAS over the past two years.

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Hindusthan Samachar / Jun Sarkar