SEBI is close to deciding how your futures and options get settled on expiry day.
Quick Summary: SEBI Chairman Tuhin Kanta Pandey said on October 10, 2026, that SEBI CAS guidelines on derivative expiry-day settlement prices would be issued in about a week, after reviewing over 20,000 public comments on its consultation paper.
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What SEBI Chairman Said About the SEBI CAS Guidelines
Speaking at the second Capital Market Confluence 2026 in Mumbai, SEBI Chairman Tuhin Kanta Pandey gave a big update. He said SEBI is almost done reviewing public feedback on the Closing Auction Session, known as CAS. New rules could come out in just a week.
Here is what Pandey actually said:
Direct quote: "Following review of the Closing Auction Session, a consultation paper was put out to address concerns in respect of the settlement price of derivatives on expiry day. We are currently examining the comments and hope to issue guidelines in about a week's time." Event details: The statement came at an event organised by the BSE Brokers' Forum (BBF) in Mumbai. Not final yet: Pandey's timeline of "a week" is an expectation, not a confirmed release date.
Why This Topic Is a Big Deal for Traders
This is not a small rule change. The settlement price on expiry day decides how much money traders win or lose on their futures and options contracts. If that price is calculated the wrong way, it can cause huge swings and unfair losses. That is why so many people are watching this closely.
Sebi To Review Derivatives Settlement Pricing After CAS Rollout Feedback
How the Closing Auction Session Problem Started
SEBI brought in the Closing Auction Session for the equity cash market starting August 3, 2026. The idea was simple. Instead of just using regular trading to set a stock's closing price, SEBI added a short auction at the end of the day to decide the official closing price.
But there was a catch. This same auction price was also used to calculate settlement prices for derivatives expiring that day. That link turned out to be risky.
August 3, 2026: CAS officially started in the cash market for stocks with listed derivatives. After launch: Traders and brokers raised concerns about sudden price jumps on expiry days. September 4, 2026: Reports confirmed SEBI would review the settlement price method.
September 12, 2026: Reuters reported SEBI had proposed changes after sharp expiry-day market swings. October 3, 2026: Deadline closed for public comments on SEBI's consultation paper. October 10, 2026: Pandey announced guidelines are expected within a week.
Why the Auction Price Caused Trouble
A short auction window can bring buyers and sellers together fast. That sounds good. But it can also create a price that moves sharply in just a few minutes. When that sharp price decides how derivatives settle, it can shake up the whole market on expiry day.
What Changes SEBI Is Considering for CAS
SEBI's consultation paper laid out a few possible fixes. These are not final decisions yet, but they show where SEBI's thinking is headed.
Blended price option: Combine the last 30 minutes of regular trading with the 10-minute closing auction to set the settlement price. Old method option: Go back, for at least one year, to using only the final 30 minutes of regular trading, without the auction. Order cancellation limit: Stop traders from cancelling limit orders placed more than 1% above or below the reference price.
Shorter trading window: Cut the derivatives trading window after the auction from 10 minutes down to 5 minutes. Index data change: Stop showing indicative index closing levels during the auction. Stock data stays: Keep showing the indicative equilibrium price for individual stocks.
More than 20,000 comments came in from traders and industry groups before the October 3 deadline, according to Business Standard. That huge number shows just how much this issue matters to everyday market participants.
What Happens Next With SEBI CAS Guidelines
Right now, SEBI is still going through all those comments. Pandey did not confirm which option SEBI will pick. He also did not share an exact date, just an estimate of about one week from October 10, 2026.
No final rule yet: SEBI has not announced which settlement method it will choose. No fixed date: "A week" is Pandey's expectation, not an official notification date.
Big stakeholder interest: Brokers, exchanges, and traders are all waiting for clarity. Next step: SEBI will likely release a circular once its internal review wraps up.
Once SEBI does announce the final rules, brokers and exchanges will need to update their systems. Traders will also need to rethink their expiry-day strategies based on whichever settlement method SEBI finally chooses.
