Closing Auction Session (CAS) Introduced in Indian Stock Markets

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On August 3, 2026, Indian stock exchanges officially introduced the Closing Auction Session (CAS) for cash market stocks that trade in the derivatives segment.
This strategic implementation follows a regulatory circular issued by SEBI back in January 2026.

CAS is a dedicated 20-minute daily trading window in the equity cash market for stocks that have derivative contracts.
Instead of calculating closing prices through continuous average trading, this mechanism pools buy and sell orders together to discover one equilibrium price.
The Securities and Exchange Board of India (SEBI) mandated this change through an official policy circular published on January 16, 2026.
Both the National Stock Exchange (NSE) and BSE rolled out this new auction framework at the same time.
The mechanism officially became active across Indian equity markets starting August 3, 2026.
The main objective is to prevent last-minute price rigging, improve price accuracy, follow global standards, and provide fair closing benchmarks for mutual funds and derivatives.

Phase 1 (3:15 PM - 3:20 PM) stops regular trading for F&O stocks at 3:15 PM and calculates a reference price using the 15-minute VWAP with a strict ±3% price band.
Phase 2 (3:20 PM - 3:25 PM) lets investors freely place, modify, or cancel both market orders and limit orders.
Phase 2 (3:25 PM - 3:30 PM) accepts only limit orders without permitting changes to market orders, closing randomly between 3:28 PM and 3:30 PM to prevent order manipulation.
Phase 3 (3:30 PM - 3:35 PM) matches orders at a single fair equilibrium price that executes maximum trade volume, giving priority to market orders over limit orders.

This special auction applies only to stocks with active F&O contracts, while all other stocks keep trading until 3:30 PM under the standard 30-minute VWAP rule.
Traders cannot place stop-loss orders, iceberg orders, or revealed-quantity orders during this session.
Unfilled limit orders from the regular session transfer automatically into CAS if their prices stay inside the ±3% price band.
Because NSE and BSE operate separate order books during the auction, stock prices on the two exchanges may show brief variations.

It determines the final cash market closing price used to settle index futures, stock futures, and options contracts.
It provides clean daily closing values for mutual funds, pension funds, and ETFs when calculating net asset values.
It helps large institutional investors complete big portfolio rebalancing orders without causing sharp price swings during regular market hours.