GENERAL16 Sept 2026
Sebi grants 1% unhedged leeway to arbitrage funds to boost closing auction participation | Stock Market News
Sebi has temporarily allowed arbitrage funds to keep up to 1% of their assets unhedged, so they can join the closing auction session (CAS). This affects arbitrage funds and anyone tracking closing prices. The aim is more liquidity during the 3:20 pm to 3:30 pm auction, though fund managers doubt it will help much. Watch Sebi's proposed changes to settlement.
Key Statutory Highlights
- Sebi has temporarily allowed arbitrage funds to carry unhedged positions of up to 1% of their assets under management so they can take part in the closing auction session.
- Under the auction system launched on 3 August, the closing price is the single price at which the highest volume of pooled orders is executed between 3:20 pm and 3:30 pm.
- NSE data shows closing auction trading volumes grew 21.6% to 31.5 million trades between 3 August and 15 September, but participation stayed weak through most of August.
Actionable Advice for Taxpayers / Founders:If you hold arbitrage funds, ask your fund house or adviser how this temporary unhedged allowance could affect your scheme's risk. Treat any improvement in auction participation as unconfirmed until Sebi finishes its review, and do not act on it as a guaranteed outcome.
Statutory Disclaimer: TaxQue Shorts are AI-assisted editorial briefs for compliance awareness. This brief has not passed every source check; confirm the original notification before acting. This does not constitute formal legal or CA counsel.
TaxQue News Desk
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