SEBI's September 12, 2026 consultation proposed two methods for settling index and stock derivatives on expiry days. One would combine transactions from the final 30 minutes of continuous trading with ten minutes of the closing auction. Their contribution would follow actual traded value, rather than a fixed weighting assigned to the auction.
The alternative would initially use only the final 30 minutes of continuous trading. A later switch to the blended method would require at least a year and an assessment of auction liquidity and experience; it would not happen automatically. The paper invited comments by October 3, rather than announcing an immediately effective settlement rule.
Separate timing options would end continuous trading in auction-eligible stocks at either 3:30 p.m. or 3:15 p.m., with derivatives closing at 3:45 p.m. or 3:30 p.m., respectively. These scheduling choices were presented separately from the settlement-method choices.
The review followed a September 3 SEBI announcement identifying expiry-day settlement as a significant concern raised after the first month of auction operations. That release recorded engagement with exchanges, brokers, proprietary traders, software vendors, mutual funds, industry associations and foreign portfolio investors. It traced the framework to a January 16 circular and two earlier public consultations, in December 2024 and August 2025.
Earlier, speaking at NISM on August 17, chairman Tuhin Kanta Pandey had said the closing auction would continue while SEBI considered operational changes, Akashvani reported. He said some participants still needed to update systems built around the former volume-weighted-average-price method. The sequence distinguishes retention of the auction for cash-market closing prices from the subsequent proposal to change how expiring derivatives are settled. This archive account was revised on October 12, 2026.
