SEBI Introduces Closing Auction Session In Equity Segment

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  • Last Updated on 19 January, 2026

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SEBI Closing Auction Session
Circular No. HO/47/11/11(3)2025-MRD-POD2/I/2765/2026, Dated 16.01.2026

1. Introduction

Securities and Exchange Board of India (SEBI) has introduced a Closing Auction Session (CAS) in the equity cash segment to improve fairness, transparency, and efficiency in the discovery of closing prices in the securities market.

2. Objective Of The Closing Auction Session

The CAS is aimed at ensuring a more robust and manipulation-resistant closing price discovery mechanism. By aggregating buy and sell orders at the close of trading, the session seeks to reflect true market demand and supply.

3. Change In Closing Price Methodology

Under the new framework, the closing price for derivative-linked stocks will be determined through the Closing Auction Session. This marks a shift from the existing Volume Weighted Average Price (VWAP)-based methodology, aligning the closing price more closely with actual market consensus.

4. Modification Of Pre-Open Auction Framework

Alongside the introduction of CAS, SEBI has aligned and modified the framework governing the pre-open auction session. These changes aim to harmonise auction mechanisms at both the opening and closing of the trading day, enhancing overall market efficiency.

5.Conclusion

The introduction of the Closing Auction Session represents a significant reform in India’s equity market structure. To be implemented in a phased manner from August 3, 2026, the new framework is expected to strengthen price discovery, reduce volatility at market close, and enhance investor confidence.

Click Here To Read The Full Circular

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Author: Taxmann

Taxmann Publications has a dedicated in-house Research & Editorial Team. This team consists of a team of Chartered Accountants, Company Secretaries, and Lawyers. This team works under the guidance and supervision of editor-in-chief Mr Rakesh Bhargava.

The Research and Editorial Team is responsible for developing reliable and accurate content for the readers. The team follows the six-sigma approach to achieve the benchmark of zero error in its publications and research platforms. The team ensures that the following publication guidelines are thoroughly followed while developing the content:

  • The statutory material is obtained only from the authorized and reliable sources
  • All the latest developments in the judicial and legislative fields are covered
  • Prepare the analytical write-ups on current, controversial, and important issues to help the readers to understand the concept and its implications
  • Every content published by Taxmann is complete, accurate and lucid
  • All evidence-based statements are supported with proper reference to Section, Circular No., Notification No. or citations
  • The golden rules of grammar, style and consistency are thoroughly followed
  • Font and size that's easy to read and remain consistent across all imprint and digital publications are applied