The Securities and Exchange Board of India (SEBI) has proposed new rules to address issues arising from the closing…
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Key takeaway
SEBI proposes new rules to address volatility caused by the closing auction mechanism in the cash segment.
- Step 1 · The triggerSEBI proposes new rules to reform the closing auction mechanism in the cash segment to address expiry-day volatility.
- Step 2 · Knock-onReduced volatility and speculation in closing auction prices improve price discovery and reduce tracking error for index-linked products, benefiting retail investors and passive funds.
- Step 3 · Reaches youSMEs with exposure to index-linked funds or F&O-linked hedging products see reduced settlement risk and more predictable outcomes on expiry days.
The trigger is reported by the source below. The steps that follow are Branch²’s traced reasoning — how the shock could reach a business like yours, not a prediction.
Source: The Hindu BusinessLine
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