SEBI Chairman Issues Warning Against Manipulation of New Closing Auction Mechanism

In a recent address, SEBI Chairman Tuhin Kanta Pandey warned that the regulatory body will take immediate action against any manipulation of the newly introduced Closing Auction Session (CAS) mechanism. This new system aims to enhance transparency and fairness in determining stock closing prices. Pandey emphasized the regulator's improved capability to detect manipulative activities compared to the previous volume-weighted average price method. He cautioned market participants against misusing the CAS, asserting that it is designed to promote integrity within the market. The CAS mechanism, launched earlier this month, replaces the old method of calculating closing prices and is expected to improve execution efficiency, particularly for large orders.

By Narendra Chaudhary Aug 19, 2026, 14:50 IST

SEBI's Stance on Market Manipulation

A file image of SEBI Chairman Tuhin Kanta Pandey (Photo: @PTI_News/X)

Mumbai, Aug 19: Tuhin Kanta Pandey, the Chairman of the Securities and Exchange Board of India (SEBI), emphasized on Wednesday that the regulatory body will take decisive and prompt measures against any attempts to manipulate the newly implemented Closing Auction Session (CAS) mechanism.

During the FICCI Capital Markets Conference held in Mumbai, Pandey highlighted that the regulator is well-equipped to identify any manipulative activities within the CAS framework.

“We want to make it clear that any manipulation in CAS will lead to immediate and strict action,” he stated.

Pandey noted that the new system enhances the regulator's ability to detect potential manipulation compared to the previous volume-weighted average price (VWAP) method.

“The CAS system allows us to identify manipulation more effectively. It is easier to catch such activities compared to the old VWAP system,” he explained.

He reiterated that the primary goal of CAS is to promote transparency and establish a fair mechanism for determining stock closing prices. He also warned market participants against misusing the system or undermining its credibility.

“CAS is designed for transparency. Anyone thinking they can manipulate it to tarnish its reputation is mistaken,” he added.

The closing auction mechanism was launched earlier this month, introducing a dedicated 20-minute session where exchanges gather buy and sell orders to establish a stock's closing price based on the maximum volume that can be executed.

This new approach replaces the previous method of calculating the closing price based on the average price of trades during the last 30 minutes of regular market hours.

The updated mechanism aims to enhance the fairness and transparency of the closing price discovery process while improving execution efficiency, especially for large orders.