The Securities and Exchange Board of India (SEBI) is reportedly examining trading activity recorded during the first week of the newly introduced Closing Auction Session (CAS) amid concerns over unusual price movements and the potential influence of low-liquidity trades on closing prices.
According to NDTV Profit report, the market regulator has received transaction data from stock exchanges and is reviewing trades executed during the closing auction window, which was rolled out recently.
The exercise is aimed at assessing whether any trading patterns may have affected the closing prices of securities, particularly in stocks with relatively low participation levels.
The review follows heightened volatility witnessed after the implementation of CAS and concerns raised by market participants regarding the price discovery process during the final minutes of trading.
The report said SEBI is examining whether limited liquidity in the initial phase of the new mechanism could make some stocks more susceptible to price influence through relatively small orders.
In a separate development, SEBI has proposed changes to debt market regulations aimed at providing issuers with greater flexibility in managing repayment schedules and reducing refinancing pressures.
In a consultation paper released on Monday, the regulator proposed increasing the maximum number of International Securities Identification Numbers (ISINs) that can mature in a single financial year from 14 to 17 for privately placed debt securities. Public comments on the proposal have been invited until August 31.
SEBI said the move is intended to help issuers, especially non-banking financial companies (NBFCs), better manage cash flows and avoid bunching of debt repayments.
Market participants had informed the regulator that existing limits often constrain liquidity management and contribute to asset-liability mismatches.
Under the proposed framework, issuers would be allowed up to 12 ISINs for plain vanilla debt securities, compared with the current limit of nine.
An additional five ISINs would be permitted for instruments such as structured debt securities, market-linked debentures, floating-rate bonds, zero-coupon bonds and debt capital instruments.
The regulator has also proposed additional flexibility for large issuers. Once the outstanding amount of plain vanilla debt maturing in a financial year reaches Rs 15,000 crore, companies could be allowed one additional ISIN for every subsequent Rs 3,000 crore of outstanding debt.
The proposed change is aimed at helping large borrowers distribute redemption obligations more evenly across the year.
