SEBI revises equity closing auction session rules and operational timelines

The Securities and Exchange Board of India introduced a revised framework for closing auction sessions in the equity cash market on October 16, 2026, setting a new 10-minute auction window from 3:30 pm to 3:40 pm. The capital markets regulator retained the 30-minute volume-weighted average price calculation method to set expiry-day settlement prices for index and stock derivatives.

The changes received approval from a key SEBI committee on the secondary market, ETV Bharat reported. Most approved provisions will take effect on December 7, 2026. Updated rules governing the transfer of pending limit and iceberg orders from continuous trading into the auction session will take effect later, on February 8, 2027.

The revised auction framework breaks the 10-minute window into specific operational phases. Between 3:30 pm and 3:31 pm, exchanges will calculate reference prices and transfer eligible orders from continuous trading. From 3:31 pm to 3:36 pm, traders can place both limit orders and market orders.

After 3:36 pm, the system will accept only limit orders, and market orders can no longer be modified or cancelled. Order entry will shut down automatically at a randomly selected time between 3:38 pm and 3:40 pm. Stock exchanges will then match orders and publish the final closing price and total executed quantity as soon as practicable.

Cash market post-close trading will run from 3:50 pm to 4:00 pm, executing trades at the official closing price of each security. Trading in index derivatives will continue until 3:45 pm on standard trading days, but trading in expiring index derivative contracts will end at 3:30 pm on expiry days. Trading in stock derivatives will run until 3:45 pm on all trading days, including expiry days.

SEBI also specified fallback rules for reference price calculations when trading activity is absent. If no trades occur in a cash security during the last 15 minutes of the continuous trading session, the last traded price of the day becomes the reference price for the closing auction. If no trades occur at all during the trading day, the previous day's closing price will act as the reference price, adjusted for corporate actions where applicable.