SEBI proposes derivatives settlement changes and launches Demat 2.0 bond pilot

The Securities and Exchange Board of India (SEBI) has issued a consultation paper proposing changes to the Closing Auction Session (CAS) and derivatives settlement methodology. Following concerns from market participants regarding volatility and unpredictable price swings on expiry days, SEBI is considering two options for determining settlement prices. The first option is a ‘Blended VWAP’ methodology, which would incorporate trades from both the last 30 minutes of the Continuous Trading Session and the 10-minute CAS. The second option proposes retaining the existing methodology as an interim measure.

In a separate technological advancement, SEBI and the Reserve Bank of India (RBI) have launched the Demat 2.0 pilot. This initiative introduces a blockchain-based infrastructure for issuing and settling corporate bonds as digital tokens. The system enables atomic settlement using the RBI’s wholesale central bank digital currency (CBDC), allowing for near-instantaneous delivery-versus-payment. The pilot has already seen participation from companies such as REC Limited, Larsen & Toubro, and IIFL, with tokenized bonds totaling approximately ₹1,025 crore already issued.