Sebi to roll out FPI netting, closing auction framework soon

Key Highlights

• At present, FPIs must settle each buy and sell transaction separately, even when trading the same stock within a single day.
• This gross-settlement requirement means investors must fully fund every purchase and deliver shares for every sale, significantly increasing funding needs and transaction costs.
• Allowing netting would remove a key operational constraint for large global investors and could make Indian markets more attractive to institutional capital.
• A closing auction mechanism, meanwhile, determines a stock’s final closing price by aggregating buy and sell orders into a single price at the end of the trading session.
• The framework is intended to curb end-of-day volatility, improve price discovery, and facilitate execution of large trades through a structured session after continuous trading ends.