India’s markets regulator proposed an overhaul of the closing auction session after sharp swings and concentrated derivatives activity around the new mechanism raised concerns among market participants. The Securities and Exchange Board of India planned amendments include derivatives settlement price, auction trading time, and order cancellations, according to a discussion paper released Saturday. The changes come after a month-old mechanism triggered volatility and liquidity issues, prompting calls for a possible return to the previous method for settling derivatives on expiry days.

Regulators aim to stabilize market behavior and improve transparency in the closing auction process, which has seen uneven participation and pricing distortions.