RPT — UPDATE 1 — India markets regulator partly reverses derivative settlement rules after pushback

(Repeats with no change in text) By Jayshree P Upadhyay, Bharath Rajeswaran and Vivek Kumar M MUMBAI, Oct 15 (Reuters) — India's markets regulator said on Thursday it would use volume-weighted average prices (VWAP) from the final 30 minutes of regular trading to settle expiring stock and index derivatives contracts, reversing its decision to use closing auction prices. The closing auction session (CAS) will continue to determine the closing prices of applicable cash-equity securities, the Securities and Exchange Board of India (SEBI) said in a circular. CAS, implemented by SEBI from August 3, had triggered a backlash from traders after sharp swings in stock and index levels during the close. Erratic movements in the expiring derivatives contracts propelled traders to pull back on volumes. Reuters reported last week that SEBI was considering reverting to 30-minute VWAP-based settlements for expiring derivatives contracts. The changes will be effective from December 7. CAS will operate as a separate 10-minute session from 3:30 p.m. to 3:40 p.m. on all trading days. Order entry will close randomly between 3:38 p.m. and 3:40 p.m. Traders can enter both limit and market orders from 3:31