SEBI says CAS will continue, signals scope to refine rules for smoother markets

India’s market regulator, the Securities and Exchange Board of India (SEBI), has reiterated that the Current Account Settlement (CAS) framework will continue, while also signalling openness to review and improve aspects that may be creating practical constraints.

In a measured message to market participants, SEBI indicated it will examine whether there are specific issues within the current set-up that can be refined. The approach aims to retain the core objectives of the framework—orderly functioning of the ecosystem and better processes—while listening to feedback from stakeholders on day-to-day implementation.

CAS: continuity with an eye on practical improvements

CAS has been positioned by the regulator as a continuing feature of the market architecture. At the same time, SEBI’s comments suggest a willingness to look closely at how rules are working on the ground—especially any constraints that may be affecting efficiency.

For investors and intermediaries, such a stance is constructive: continuity provides stability and predictability, while a review process can help remove friction points that emerge as markets evolve.

Importantly, SEBI’s articulation keeps the conversation focused on improvements rather than disruption. By indicating that the framework will remain in place, the regulator is offering clarity, while also acknowledging that fine-tuning may be needed to strengthen outcomes.

Consultation paper planned on securities lending and borrowing

Alongside its remarks on CAS, SEBI said it will soon issue a consultation paper on the securities lending and borrowing mechanism. Consultation papers typically invite public comments and industry feedback, helping the regulator assess implementation realities and potential refinements.

Securities lending and borrowing is an enabling mechanism for market functioning. A structured review can help improve transparency, participation and operational ease, while supporting responsible market practices.

For India’s capital markets, consultations are often an important step in building consensus across brokers, custodians, clearing corporations, asset managers and other stakeholders. They also create room for evidence-based changes, allowing the regulator to weigh differing viewpoints and design rules that work at scale.

A steady, collaborative regulatory signal

SEBI’s messaging reflects a balancing act that many modern regulators aim for: keep the foundational guardrails intact, but remain flexible enough to remove bottlenecks and incorporate learning.

For businesses and financial institutions, this can be encouraging. Predictable regulation supports long-term planning, while structured engagement through consultation papers helps the ecosystem raise practical concerns in a constructive manner.

As India’s markets expand in breadth and participation, incremental improvements in rules and processes can have a meaningful impact—reducing operational complexity, improving confidence and strengthening the overall quality of market infrastructure.

**Why it matters:** By reaffirming that CAS will continue while remaining open to refinements—and by planning a consultation on securities lending and borrowing—SEBI is signalling stability with responsiveness, supporting smoother market operations and stakeholder-led improvements.