India's securities regulator is undertaking a comprehensive review of derivative settlement price mechanisms following significant market volatility during Closing Auction Sessions. Market participants have raised concerns about abrupt option price fluctuations occurring on expiry days when the new auction window is active. This regulatory reassessment aims to ensure fair pricing and market stability after the CAS implementation in the equity cash segment proved effective. Sebi will soon release a consultation paper outlining potential reforms to address these settlement challenges.

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