The Securities and Exchange Board of India (SEBI) has revised the timings and operational framework of the Closing Auction Session in the equity cash market. It has also updated the settlement methodology for stock and index derivatives contracts. Under the new framework, the Closing Auction Session will operate for 10 minutes, from 3.30 PM to 3.40 PM, on all trading days. The session will include different phases for calculating the reference price and placing orders. The order-entry window will close randomly between 3.38 PM and 3.40 PM.
Trading in stock and index derivatives will continue until 3.45 PM. On expiry days, however, trading in expiring index derivatives contracts will end at 3.30 PM. Stock derivatives trading will continue until 3.45 PM. The post-closing session in the cash market will run from 3.50 PM to 4 PM, with trades executed at the closing price.
SEBI has also revised the method for calculating settlement prices on expiry days. For index derivatives, settlement prices will be based on the underlying index value, calculated using the volume-weighted average prices of constituent stocks during the final 30 minutes of continuous trading. For stock derivatives, settlement prices will be based on the volume-weighted average price of the underlying stock during the same period.
The regulator has also specified rules for carrying forward unexecuted orders into the Closing Auction Session. These include provisions for iceberg orders, which will be converted into fully disclosed limit orders, subject to specified conditions. The revised provisions, except those relating to the transition of unexecuted orders, will take effect from 7 December 2026. The provisions concerning unexecuted limit and iceberg orders will come into force on 8 February 2027. SEBI has directed stock exchanges and clearing corporations to make the necessary system and procedural changes in consultation with the regulator within seven days of its circular issued yesterday.
