SEBI’s Closing Auction Session Goes Live, Changing How Stock Closing Prices Are Determined

The Securities and Exchange Board of India (SEBI) has introduced a new mechanism for determining stock closing prices through a closing auction session. This session aims to enhance market efficiency by ensuring fairer price discovery. Traders and investors will now have the opportunity to participate in real-time bidding during the auction period, which typically occurs at the end of the trading day. The auction process involves multiple rounds of bidding, allowing for a more transparent and competitive determination of the final closing price. This change is expected to reduce discrepancies between the last traded price and the actual closing price, thereby improving market integrity and investor confidence. SEBI’s move aligns with global practices where auction-based closing mechanisms are used to standardize pricing and mitigate potential manipulation.