MSCI India rebalancing went well under CAS, says SEBI chief: Report

The Securities and Exchange Board of India (SEBI) Chairman Tuhin Kanta Pandey said MSCI acknowledged that India's new Closing Auction Session (CAS) handled trades linked to its index rebalancing well, Bloomberg reported.

According to the report, Pandey said the experience with the MSCI rebalancing was positive despite concerns that the new mechanism could face challenges in handling large institutional flows. The latest MSCI rebalancing was the first major test of the CAS since its introduction.

The SEBI chief also said the methodology for determining derivatives' closing prices under the new system is being reworked.

Pandey, as per the report, noted that markets that introduced similar closing-auction mechanisms initially faced liquidity issues, but liquidity improved over time.

The CAS was introduced as a new mechanism for determining closing prices, with the auction session taking place after regular trading. The system has faced concerns over sharp price moves and liquidity since its rollout, prompting SEBI to review certain aspects of the framework.

Meanwhile, Indian equity benchmarks ended higher on Thursday, snapping a three-session losing streak, after sharp swings in the final minutes of trade on Sensex expiry day, with the CAS remaining in focus.

The 30-share BSE Sensex pack, which was at 74,521.79 around 3:21 pm, jumped 1,186.55 points to 75,708.34 by 3:23 pm. On NSE, Nifty 50 rose from 23,389.25 at around 3:19 pm to 23,761.65 by 3:21 pm.

Sensex eventually settled 138.36 points or 0.19 per cent higher at 74,902.59, while Nifty50 gained 46.30 points or 0.20 per cent to close at 23,477.80.