CAS Mechanism Will Identify Market Manipulators, Asserts SEBI Chief

Gist The Securities and Exchange Board of India SEBI has replaced the legacy Volume Weighted Average Price VWAP method with the Closing Auction Session CAS to determine the daily closing prices of stocks. This targeted transition equips the market regulator with a streamlined mechanism to detect and penalize end-of-day price manipulation more effectively. For civil services aspirants, this marks a vital technical shift in capital market regulation, reflecting the evolving surveillance architecture designed to protect investor wealth and ensure market integrity. Background - Significance of Closing Prices: Stock market closing prices act as critical benchmarks utilized globally for mutual fund portfolio valuation, index calculation, and the settlement of derivative contracts. - The Legacy VWAP System: Previously, Indian stock markets utilized the Volume Weighted Average Price VWAP , which calculated the closing price as the average price of trades executed during the final 30 minutes of the trading day, weighted by share volume. - The New CAS Mechanism: The newly implemented Closing Auction Session CAS introduces a dedicated end-of-session time window where buyers and sellers place blind bids, deriving a single…