Kirit Somaiya Raises Voice on CAS Volatility: SEBI Asked to Probe Sensex Crash and Recovery
Former BJP MP Dr. Kriti Somaiya has raised serious concerns over the sharp volatility seen in the final minutes of trading and urged SEBI Chairman Tuhin Kanta Pandey to review and investigate possible manipulation under the Closing Auction Session (CAS) system.
On August 27, the BSE Sensex witnessed an extraordinary move during the final 12 minutes of trading, plunging more than 2,200 points before recovering nearly 2,000 points. The sharp reversal has intensified questions over price discovery and volatility during the CAS period.
Somaiya has called for strict action against market manipulators and urged the regulator to examine the unusual movements in the Sensex and Bankex during the final minutes of trading.
CAS System Under Scrutiny
The latest volatility has renewed concerns about whether the current CAS mechanism needs to be redesigned or whether its implementation should be reconsidered.
Market participants are particularly watching the last 15 minutes, when the CAS mechanism plays a crucial role in determining the official closing price. The sharp Bankex and Sensex movements seen on August 27 have added to concerns ahead of the upcoming expiry.
Despite the growing debate, SEBI has indicated that there are currently no plans to make changes to the CAS system.
Fear Ahead of Expiry?
The combination of extreme last-minute volatility, sharp reversals and expiry-related trading could increase uncertainty and fear among traders.
The key question now is whether the August 27 movement was simply extreme market volatility or whether regulators need to conduct a deeper investigation into possible manipulation.
With the next expiry approaching, traders are watching the CAS closing mechanism more closely than ever. I wrote, requested SEBI Chairman to review & inquire about #CAS Manipulation & Volatility in last few minutes.
27 August BSE during last 12 minutes of trading at NSE/BSE Sensex crashed over 2,200 points & than recovered 2,000 points.
Want Action against Manipulators pic.twitter.com/wY64HuZM15