Mumbai, Oct. 15 -- The Securities and Exchange Board of India (Sebi) is likely to adopt a blended pricing framework for calculating settlement prices in the derivatives segment, seeking to curb sharp price swings and distortions on weekly and monthly options expiry days, according to three people aware of the development.

The proposed approach would combine the volume-weighted average price (VWAP) of trades during the last 30 minutes of continuous trading with prices discovered in the 10-minute closing auction session (CAS). This would reduce reliance on the auction alone to determine settlement prices, which has contributed to volatility amid thin trading volumes since the new system was introduced on 3 August.

"The market regulator is...