Regulatory Alerts2026-01-16
Introduction of Closing Auction Session in Equity Cash Segment and Modifications to Pre-Open Auction
SEBI mandates the introduction of a Closing Auction Session (CAS) for equity cash segment stocks with derivative contracts, replacing the previous VWAP-based closing price mechanism to enhance transparency and liquidity. The circular establishes a 20-minute CAS from 3:15 pm to 3:35 pm utilizing an equilibrium price mechanism, while simultaneously modifying the Pre-Open Auction Session framework to align with these new auction principles. Implementation is scheduled for August 3, 2026, for CAS and September 7, 2026, for the Pre-Open Session modifications, requiring stock exchanges and clearing corporations to develop necessary standard operating procedures.
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