Mumbai, Aug 2 (IANS) Investors will witness significant changes in stock market trading from Monday (August 3), as the Securities and Exchange Board of India (SEBI) implements a revised trading framework aimed at strengthening price discovery, improving market efficiency and aligning India’s market structure with global standards.
A key feature of the new framework is the introduction of a Closing Auction Session (CAS) for Futures and Options (F&O)-eligible, or Category I, stocks in the equity cash segment.
The regulator said the move is designed to ensure a fair and transparent determination of closing prices through an auction mechanism while improving liquidity and execution efficiency.
Under the revised schedule, regular trading for F&O-eligible stocks will continue until 3:15 pm, followed by a transition period lasting until 3:20 pm.
The Closing Auction Session will then commence with the first order entry phase from 3:20 pm to 3:25 pm.
A second order entry phase will run from 3:25 pm to 3:30 pm, during which investors will not be permitted to modify or cancel market orders. The auction will conclude randomly within the final two minutes of this phase.
Order matching will take place between 3:30 pm and 3:35 pm, after which the auction price will be determined.
The price discovered through the Closing Auction Session will serve as the official closing price for all F&O-eligible stocks.
SEBI has clarified that trading hours for non-F&O equity cash stocks will remain unchanged, with the market continuing to close at 3:30 pm.
The regulator has also extended trading hours in the equity derivatives segment by 10 minutes.
Trading in the F&O segment will now continue until 3:40 pm, while timings for all other market segments will remain unchanged.
Another important change relates to the pre-open session. Under the revised framework, the order entry window will remain open from 9:00 am to 9:07 am, followed by order matching from 9:07 am to 9:15 am. The regular trading session will continue to begin at 9:15 am.
According to SEBI, the new Closing Auction Session is expected to improve the quality of closing prices by aggregating liquidity through an auction-based process.
The regulator said the framework will provide equal access to all investors, reduce tracking errors for passive investment funds and bring India’s equity market practices closer to global benchmarks.
–IANS
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