Challenges and Historical Context of CAS Implementation

While the CAS model offers a promising alternative, it is not without challenges; historical examples, such as its initial introduction in Hong Kong, highlight potential risks of market manipulation. A significant incident involving a large sell-off leading to a temporary price collapse demonstrates how CAS can be susceptible to similar vulnerabilities if not carefully designed and regulated. SEBI plans to implement CAS gradually, initially targeting stocks with substantial liquidity, but this approach may complicate investor understanding compared to the more straightforward VWAP system. Moreover, the technological requirements and increased time needed for the auction process could impose higher operational costs, raising questions about its feasibility and acceptance in India's evolving market.