SEBI keeps CAS intact, but hints at tweaks through review process

We will see if there are certain constraints or certain issues that we can improve. The regulator will soon issue a consultation paper on the securities lending and borrowing mechanism

Source

The Hindu — Business →

Quick Revision

Prelims-testable facts

01SEBI has introduced the Closing Auction Session (CAS) mechanism for determining closing prices.
02The CAS mechanism is here to stay, but SEBI is open to reviewing it for improvement.
03SEBI will soon issue a consultation paper on the securities lending and borrowing mechanism.
04SEBI is analysing market feedback and trading data for CAS to understand potential issues.
05SEBI officials are going through suggestions and feedbacks from market players and on social media.
06SEBI Chairman Tuhin Kanta Pandey has stated that CAS will remain as the regulator reviews market feedback.
07The regulator is reviewing trader feedback, expiry-date data, and other concerns around the new closing auction mechanism.

Trap alerts

Most people think SEBI has abolished the CAS mechanism, but actually it is here to stay.
Most people think SEBI is not reviewing the CAS mechanism, but actually it is open to reviewing it for improvement.

Prelims Practice MCQs

Single facteasy

SEBI will issue a consultation paper on which mechanism?

A.securities lending and borrowing mechanism
B.securities market regulation mechanism
C.capital market regulation mechanism
D.stock market regulation mechanism

SEBI will review the securities lending and borrowing mechanism for improvement by issuing a consultation paper. This regulatory mechanism is used to facilitate the borrowing and lending of securities.

Multiple statementsmedium

Consider the following statements regarding Securities Lending and Borrowing Mechanism: 1. SEBI will soon review the securities lending and borrowing mechanism for improvement. 2. SEBI has already reviewed the securities lending and borrowing mechanism and found it satisfactory. 3. SEBI will issue a consultation paper on the securities lending and borrowing mechanism soon. How many of the above statements are correct?

A.Only one
B.Only two
C.All three
D.None

Statement 1 is correct because SEBI will issue a consultation paper on the securities lending and borrowing mechanism soon (fact 8). Statement 2 is false because SEBI has not already reviewed the mechanism and found it satisfactory (no fact supports this). Statement 3 is correct because SEBI will issue a consultation paper on the securities lending and borrowing mechanism soon (fact 8).

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