Tuhin Kanta Pandey, chief of the Securities and Exchange Board of India (SEBI), said there has been no manipulation in new closing auction sessions.
The statement aims to reassure investors following criticism regarding low liquidity and price swings. By addressing these concerns, the regulator seeks to promote transparency and encourage more active involvement in the market.
Pandey said the integrity of the newly introduced sessions, which are designed to determine the final closing prices of securities, remains intact. These sessions have faced scrutiny from market participants who feared that low volume could allow a small number of traders to influence prices unfairly.
"There is no manipulation in the closing auction sessions so far," Pandey said.
Despite the lack of evidence regarding foul play, the SEBI chief said the market requires broader participation. Increased volume is seen as a primary mechanism to stabilize the auctions and reduce the volatility that often characterizes low-liquidity environments.
The push for greater participation is intended to create a more robust price-discovery process. This would make the closing price a more accurate reflection of the true market value of stocks, reducing the risk of sudden spikes or drops during the final minutes of trading.
SEBI continues to monitor the sessions as part of its oversight of India's stock market. The regulator's focus remains on balancing the efficiency of the new auction system with the need for fair and equitable access for all investors.
“"There is no manipulation in the closing auction sessions so far."”
The SEBI chief's comments indicate that while the technical framework of the closing auctions is functioning without fraud, the system is struggling with a lack of depth. For the market to achieve stability, the regulator must move beyond policing manipulation and successfully incentivize a larger pool of buyers and sellers to enter the closing window.
