The Securities and Exchange Board of India (SEBI) is introducing a Closing Auction Session (CAS) to determine stock closing prices more transparently. Replacing the current 30-minute average method, CAS will run for 20 minutes at market close. The phased rollout begins August 3, 2026, initially covering derivative-linked stocks.
SEBI’s New Approach to Closing Price Discovery
In a major reform aimed at curbing volatility and manipulation near market close, SEBI has approved a Closing Auction Session (CAS) for India’s equity cash market. This move aligns Indian markets with global practices, ensuring greater transparency and integrity in price determination.
Key Highlights
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Current System: Closing prices are based on the volume-weighted average price (VWAP) of trades in the last 30 minutes.
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New Framework: CAS will pool buy and sell orders in a 20-minute auction window to arrive at a single equilibrium price.
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Implementation Timeline: Phased rollout starting August 3, 2026, initially for stocks linked to derivatives.
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Objective: Reduce price manipulation, improve accuracy, and enhance investor confidence.
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Global Alignment: Similar auction mechanisms are already in use across major international exchanges.
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Impact: Expected to provide more reliable benchmarks for mutual funds, ETFs, and index-linked products.
Why It Matters
Closing prices are critical for fund valuations, index calculations, and investor decisions. By adopting CAS, SEBI strengthens India’s market infrastructure, ensuring fairer outcomes and reducing risks of end-of-day volatility.
Sources: Mint, Economic Times, CNBC-TV18