SEBI extends F&O trading till 3:40 PM from August 3; introduces closing auction session
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Starting Monday, August 3, investors will see notable shifts in stock market trading after SEBI rolls out an updated framework designed to boost price discovery, lift market efficiency, and bring India’s market structure in line with global norms.
Key Takeaways
- SEBI introduced a Closing Auction Session (CAS) for F&O-eligible stocks starting Monday, August 3.
- Regular trading for these stocks will run until 3:15 pm, followed by a transition phase to 3:20 pm.
- The framework aims to improve fair closing-price discovery and boost liquidity and execution efficiency.
- The change aligns India’s market structure closer to global trading norms.
A central element of the updated framework is the launch of a Closing Auction Session (CAS) for Futures and Options (F&O)-eligible, also called Category I, stocks within the equity cash market.
According to the regulator, the initiative seeks to guarantee a fair and transparent closing‑price discovery via an auction process, while also enhancing liquidity and execution efficiency.
Under the new timetable, regular trading for F&O‑eligible stocks will run until 3:15 pm, after which a transition phase will extend to 3:20 pm.
The Closing Auction Session will start with the first order‑entry window from 3:20 pm to 3:25 pm.
A second order‑entry period will run from 3:25 pm to 3:30 pm, during which investors cannot alter or cancel market orders; the auction will close at a random point in the last two minutes of this window.
Order matching will occur from 3:30 pm to 3:35 pm, after which the auction price will be set.
The price derived from the Closing Auction Session will become the official closing price for all F&O‑eligible stocks.
SEBI clarified that trading hours for non‑F&O equity cash securities will stay the same, with the market still closing at 3:30 pm.
The regulator has also lengthened trading hours in the equity derivatives segment by ten minutes.
Trading in the F&O segment will now run until 3:40 pm, while the schedules for all other market segments stay unchanged.
Another notable adjustment concerns the pre‑open session. Under the revised framework, the order‑entry window stays open from 9:00 am to 9:07 am, followed by order matching from 9:07 am to 9:15 am, with regular trading commencing at 9:15 am.
SEBI says the new Closing Auction Session should enhance closing‑price quality by pooling liquidity through an auction‑based method.
The regulator added that the framework will give all investors equal access, cut tracking errors for passive funds, and align India’s equity market practices more closely with global benchmarks.
