The Securities and Exchange Board of India has revised the equity cash segment’s Closing Auction Session framework and the expiry settlement methodology for stock and index derivatives following a review of the system introduced in January 2026. The Closing Auction Session will run from 3:30 p.m. to 3:40 p.m., with a system driven random close between 3:38 p.m. and 3:40 p.m. Trading in index and stock derivatives will continue until 3:45 p.m., except that expiring index derivatives will stop trading at 3:30 p.m. on expiry days. Closing Auction Session reference prices will generally use the volume weighted average price from the final 15 minutes of continuous cash trading. On expiry, index derivatives will settle using the underlying index value calculated from constituent securities’ volume weighted average prices over the final 30 minutes of continuous trading, while stock derivatives will use the underlying stock’s corresponding volume weighted average price across all exchanges. Unexecuted iceberg orders within the applicable price bands will transfer into the auction as fully disclosed limit orders unless the participant opts out, with lower priority than other limit orders carried over from continuous trading but higher priority than orders entered during the auction. Most changes take effect on Dec. 7, 2026, while the provisions governing the transfer of unexecuted limit and iceberg orders take effect on Feb. 8, 2027. Recognized stock exchanges and clearing corporations must update their standard operating procedures within seven days and make the necessary system and rule changes.

Original source