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Informist, Saturday, Aug. 1, 2026

 

MUMBAI - The stock exchanges will implement the new closing auction session for the equity cash segment from Monday. This will change significantly the way in which cash market orders are handled and executed, and trading prices determined, for shares of companies in the permitted stock derivatives list, from 1515 IST to 1535 IST on trading days. The stocks will be traded as usual in the continuous trading session of the equity cash segment from 0915 IST to 1515 IST.

 

The framework for orders and trades in the rest of the listed stocks in the equity cash segment will see no change and their trading session will continue to be from 0915 IST to 1530 IST.

 

The objective of the closing auction session, according to the Securities and Exchange Board of India, is to provide mutual funds, particularly index funds and index exchange-traded funds, a "more stable and less volatile closing price" as compared to the current practice of using the volume-weighted average price of trades executed during the last 30 minutes of the continuous trading session as the closing price.

 

The closing auction session, which is mandated to take effect Monday as per SEBI's circular of Jan. 16, will be split into four sub-sessions of five minutes each starting 1515 IST.

 

The table below outlines the timeline of the closing auction session for the equity cash segment.

 

Sub-session	Particulars	Start time	Duration
1	Reference price calculation, transition from CTS* to CAS**	1515 IST	5 minutes
2	Order entry period - for both limit and market orders	1520 IST	5 minutes
3	Order entry period for only limit orders, no modification or cancellation for market orders, random close in last 2 minutes	1525 IST	5 minutes
4	Order matching	1530 IST	5 minutes

* Continuous Trading Session

** Closing Auction Session

 

In the first part of the closing auction session between 1515 IST and 1520 IST, the exchanges will calculate the closing reference price based on the volume-weighted average price of trades in the last 15 minutes till 1515 IST and disseminate these to the market. During this time, no trades will be executed from orders pending as of 1515 IST, nor will investors be allowed to enter any fresh orders or cancel or modify pending orders. In other words, all equity cash market trading activity in the selected stocks will come to a halt for the first five minutes of the closing auction session.

 

The exchanges will, however, be busy in these five minutes and cancel those pending orders where the investor had applied a stop-loss or a revealed-quantity condition. Limit orders with prices outside the revised price band of (-)3% to 3% will also get cancelled by the exchanges in the first five minutes of the closing auction session.

 

In the second part of the closing auction session between 1520 IST and 1525 IST, investors can enter fresh limit orders and market orders and modify or cancel their pending orders. Fresh orders will have to be without stop-loss and with quantity revealed in full. Trade execution will not take place in this period.

 

In the third part of the closing auction session between 1525 IST and 1530 IST, investors can continue to enter, modify, or cancel limit orders. But fresh market orders will not be permitted. Modification and cancellation of pending market orders will also not be allowed. This part of the session will be ended at any time between 1528 IST and 1530 IST by the stock exchanges.

 

At 1530 IST, all pending orders will be put through a five-minute order matching session where the equilibrium price will be determined and orders that can be executed at this price will get executed into trades. The equilibrium price will be the price at which the maximum order volume is executable. It will serve as the closing price of the shares for the day.

 

This closing price will also be the basis for calculation of the settlement price of the stock in question by clearing corporations for stock and index derivatives. The existing pre-open auction session framework will get realigned with that of the closing auction session with effect from Sept. 7, as per the SEBI circular.   End

 

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

 

Reported by Rajesh Gajra

Edited by Rajeev Pai

 

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