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Informist, Thursday, Sept. 10, 2026

 

--SEBI chief: Closing auction session will not be rolled back

--SEBI chief: Only seeing if F&O settlement price can be based differently

 

MUMBAI – The Securities and Exchange Board of India will not roll back the closing auction session that was launched in early August, Chairman Tuhin Kanta Pandey said at an impromptu press conference on the sidelines of the Global Fintech Fest 2026. Pandey said SEBI is, however, factoring in feedback from a section of market participants that the equity futures and options settlement price be delinked from the closing price determined from the closing auction session.

 

Pandey said the consultation paper that SEBI had said on Aug. 3 it would issue in a week would be released soon. The paper will propose changes to the methodology for determining settlement price on expiry of futures and options contracts, he said.  

 

Traders had raised issues with SEBI that weak liquidity in the cash market during the 15-minute closing auction session window was causing problems to their open positions in the equity futures and options segment. Pandey said SEBI got such feedback and while international experience has been that of gradual increase in liquidity in closing auction sessions after launch, the market regulator was conscious of finding a "temporary solution" for traders in the equity derivatives segment.

 

Currently, the closing auction session-determined equilibrium price is the official closing price for the cash market. The settlement price for futures and options contracts of individual stocks are based on the official closing prices of those stocks. The indices' closing values, too, are calculated based on official closing prices of underlying stocks and the official index closing value serves as the settlement price for an index's futures and options contracts.

 

Prior to the introduction of the closing auction session mechanism, official closing prices were based on the volume weighted average price of the last 30 minutes of the continuous trading session that ended at 1530 IST. The settlement prices for equity derivatives were based on this closing price and traders never had a problem. Since the closing auction session came in, however, the continuous trading session in the cash market ends at 1515 IST but equity derivatives segment trading is kept open till 1540 IST. The closing auction session in the cash market is conducted from 1515 IST to 1530 IST.  End

 

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

 

Reported by Rajesh Gajra

Edited by Avishek Dutta

 

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