The Securities and Exchange Board of India (SEBI) on Saturday has proposed two alternative trading schedules for the closing auction session and equity derivatives market. This is a part of a wider review aimed at improving liquidity, transparency and price discovery.
Under Option A, normal trading in stocks eligible for the closing auction session, or CAS, would continue until 3:30 pm The CAS would then run from 3:31 pm to 3:40 pm, while trading in the futures and options segment would remain open until 3:45 pm.
Option B proposes an earlier close for the affected cash-market stocks. Continuous trading would end at 3:15 pm, followed by the CAS from 3:15 pm. to 3:25 pm. The F&O market would close at its existing time of 3:30 p.m.
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SEBI has also proposed reducing the transition period before the CAS to one minute from five minutes. The trading window for equity derivatives after the auction would be shortened to five minutes from 10 minutes.
The regulator has presented two approaches for determining derivatives settlement prices. The first would use trades from both the continuous trading session, or CTS, and the closing auction. The second would retain CTS-only settlement prices initially and consider including CAS trades after at least one year.
No indicative index value based on the indicative equilibrium price would be displayed during the auction. Limit orders placed ±1% of reference price cannot be cancelled during CAS. Such orders can only be modified to improve the price.
Unexecuted Iceberg orders would enter the auction as regular, fully disclosed limit orders. The proposals form part of its review. SEBI has invited public comments on the consultation paper until October 3, 2026.
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