The Closing Auction Session (CAS) replaced the 26-year-old VWAP closing system for F&O stocks, aiming to deliver a fairer and more transparent closing price
CAS uses a 20-minute auction after market close, matching buy and sell orders to determine the price where the highest volume can be executed
Instead of improving certainty, CAS has led to sharp post-close price movements and noticeable differences in closing values across exchanges
An auction system works best with deep, diverse participation. Without sufficient liquidity, price gaps and market inefficiencies become more likely
Closing-price volatility affects mutual funds, institutional portfolios and investor returns, creating winners and losers because of market anomalies
If CAS fails to achieve its objectives, regulators and exchanges should reassess the framework and refine it to suit India's market realities