The markets regulator met some of the large stock brokers on Wednesday and asked them to visibly display indicative equilibrium prices and other relevant CAS-related information on their trading platforms to increase investor awareness and participation
The Securities and Exchange Board of India (SEBI) is unlikely to immediately revisit its newly introduced Closing Auction Session (CAS) even as sections of the market raised concerns following sharp swings in the Nifty's official closing value. Instead, has asked brokers to improve investor participation and visibility of auction prices, according to sources aware of the discussions.The markets regulator met some of the large stock brokers on Wednesday, and asked them to visibly display indicative equilibrium prices and other relevant CAS-related information on their trading platforms to increase investor awareness and participation.Auction mechanismBrokers have been asked to take measures to educate their clients about the mechanism and make the required changes to their trading systems to display indicative auction prices so that investors can make informed decisions.“The framework was cleared after thorough review. It's too soon to evaluate a review. The focus is on improving understanding and ensuring a smoother transition of investors into the new mechanism,” said a person aware of the discussions.The stock exchanges had also held discussions with large brokers on Tuesday to understand investor concerns and any operational issues arising during the initial days of CAS.This comes after two days of confusion among traders after the introduction of CAS. Several investors have raised concerns over the sharp movement in closing prices before and after the auction.Closing divergenceOn the first day of implementation of CAS, the Nifty 50 index rose 200 points after the closing auction from the last traded price from continuous trading, which now ends at 3.15 pm. The Nifty’s close price recovered around 150 points post-auction the next day, with a divergence from the closing price of BSE’s Sensex.The divergence persisted on Wednesday, with Sensex rising 152 points, or 0.2, to end at 78,581, while the Nifty 50 ended up 10 points, or 0.04 percent, to close at 24,624.65 points.During the 20-minute closing auction session, buy and sell orders are collected and matched at a single equilibrium price. Investors can place, modify or cancel auction orders based on an indicative equilibrium price determined through matching demand and supply.Many traders were unable to see the indicative auction prices before placing an order during the auction, making it difficult for investors to judge where the market was likely to settle. In a thin auction window, even modest order imbalances can move the equilibrium price sharply.Published on August 5, 2026
