SEBI Introduces Closing Auction Session In The Equity Cash Segment And Certain Modifications In The Pre-Open Auction Session

SEBI by way of circular dated 16.01.2026¹ ("CAS Circular"), has introduced a Closing Auction Session ("CAS") in the equity cash segment and modified the PreOpen Auction Session framework.

SEBI has decided to introduce CAS to determine the closing price of stocks, replacing the existing Volume Weighted Average Price ("VWAP") mechanism for securities on which derivative contracts are available. The CAS will operate as a separate 20-minute session from 3:15 PM to 3:35 PM on all trading days, comprising order entry periods, a random close mechanism in the last 2 minutes, and order matching. The closing price will be determined based on an equilibrium price mechanism that maximizes executable volume.

Key features include a +/- 3% price band from the reference price (calculated based on VWAP between 3:00 PM to 3:15 PM), allowance of only limit and market orders (with market orders receiving priority), and carrying forward of eligible unexecuted limit orders from the Continuous Trading Session. The Pre-Open Auction Session has also been modified to align with the CAS framework, including revised timings and order execution priorities.

SEBI has directed stock exchanges and clearing corporations to formulate standard operating procedures within 30 days, implement CAS from 03.08.2026, and implement Pre-Open Session changes from 07.09.2026.

Footnote

1 Introduction of Closing Auction Session (CAS) in the Equity Cash Segment and certain modifications in the Pre-Open Auction Session.

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