Sebi’s CAS guidelines likely within a week, says chief Tuhin Kanta Pandey

The CAS review is part of Sebi’s broader efforts to deepen India’s cash markets, improve price discovery and enhance market efficiency.

“Following review of the Closing Auction Session, a consultation paper was put out to address concerns in respect of settlement price of derivatives on expiry-day. We are currently examining the comments and hope to issue guidelines in about a week’s time,” Pandey said at the second Capital Market Confluence 2026, organised by the Bombay Stock Exchange Brokers’ Forum in Mumbai.

The CAS review is part of Sebi’s broader efforts to deepen India’s cash markets, improve price discovery and enhance market efficiency. Pandey said wider participation, stronger securities borrowing and lending, and efficient hedging and arbitrage could help improve liquidity and the functioning of cash markets.

In his address, titled “From Regulation to Global Leadership: Positioning India’s Capital Markets as a Standard-Setter for the Next Decade”, the Sebi chairman outlined four broad priorities for the market regulator: proportionate regulation, deeper cash markets, easier access to Indian markets and greater technological resilience.

On the regulatory front, Pandey said Sebi was reviewing the Depositories and Participants Regulations to simplify rules and strengthen fraud prevention. The regulator is also exploring a graded compliance framework for stock brokers based on their scale, client exposure and dependence on technology.

“One size need not fit all,” he said.

Sebi is also addressing gaps in the interoperability framework for certain transactions, including tender offers, buybacks and offers for sale (OFS). These transactions currently require parallel clearing arrangements, adding to costs and compliance requirements, Pandey said.

The regulator is targeting implementation of the proposed changes by the end of November 2026. The move is expected to improve capital efficiency and lower compliance costs while preserving settlement safety, he said.

On easing access to Indian markets, Pandey said Sebi had consulted on simplifying digital onboarding for Persons Resident Outside India (PROIs), without requiring their physical presence. The regulator has received more than 400 comments on the proposal and will issue a circular shortly.

Technology and market resilience will remain key priorities, with Sebi strengthening business continuity, disaster recovery, cybersecurity safeguards and governance across market infrastructure institutions.

The regulator will also issue guidelines shortly for the responsible use of artificial intelligence (AI) and machine learning. The proposed framework will follow a tiered approach, with provisions for clear accountability, data controls, kill switches and human oversight. Sebi will also align the framework with the International Organization of Securities Commissions’ (IOSCO) Supervisory Toolkit for AI.

Pandey said India’s capital markets had expanded significantly over the past decade, with market capitalization at around Rs 472 lakh crore and more than 15 crore unique investors. Mutual fund assets stood at around Rs 87 lakh crore, while outstanding corporate bonds amounted to around Rs 61 lakh crore.

However, he added market leadership would depend on more than scale, requiring stronger investor protection, efficient market infrastructure and responsible innovation.

“Compete on technology. Compete on service. Compete on efficiency. But above all, compete on trust,” Pandey said, urging market intermediaries to make investor confidence central to their operations.

Disclosure: This article has been written by Kumar Gaurav, who is not a Sebi-registered Research Analyst or an Investment Adviser. Gaurav and their ‘relative(s)’ (as defined under Section 2(77) of the Companies Act, 2013) do not hold any financial interest in the companies mentioned in this article as of the date of publication. The views/recommendations mentioned in this article, wherever applicable, are those of the respective Sebi-registered Research Analyst/brokerage and have been reproduced/reported with due attribution. They should not be construed as the views or recommendations of The Economic Times Digital or the journalist. Readers are advised to consider the original research report and make their investment decisions based on their own assessment. Brokerage disclaimers here.