India's markets regulator sees no manipulation in stock closing auction, chief says

According to Business Recorder, Tuhin Kanta Pandey, chairman of India's Securities and Exchange Board, said on Wednesday that the regulator has found no evidence of manipulation in the recently launched closing auction. The 20-minute session, which started last week, collects buy and sell orders so that each stock's closing price settles at the level that allows the largest volume to trade. The new step replaced an older method that averaged trade prices over the last 30 minutes.

Pandey called the auction a major reform in line with global norms and said the regulator is weighing several inputs to attract more participants. He added that any new system needs time to settle. Mutual fund involvement has climbed from 5%-6% on the first day to 20%-25% since, though concerns have been voiced over thinner participation and losses borne by some market participants.

Pandey also said the change is aimed at lowering the tracking error faced by passive funds. The remarks were made at an event in Mumbai.