SEBI has revised closing auction timings, derivatives trading hours, VWAP-based settlement norms, and iceberg order regulations, effective December 2026 and February 2027.
SEBI Revises Closing Auction and Derivatives Trading Framework
In a significant move to enhance market efficiency and transparency, the Securities and Exchange Board of India (SEBI) has amended regulations concerning closing auction timings, derivatives trading hours, settlement mechanisms based on Volume Weighted Average Price (VWAP), and iceberg order protocols. The changes will be implemented in a phased manner, with most provisions coming into force from December 2026 and full application by February 2027.
Key amendments include the adjustment of closing auction window timings to better align with global market practices, modifications to the duration and access during derivatives trading hours, and the institutionalization of VWAP as the benchmark for settlement in certain derivative contracts. Additionally, SEBI has tightened disclosure and operational requirements for iceberg orders to prevent potential manipulation and ensure greater market fairness.
These regulatory updates signal SEBI’s continued focus on modernizing India’s capital markets infrastructure. Market participants, including stock exchanges, brokers, and clearing corporations, must adapt their systems and compliance protocols ahead of the implementation deadlines. The changes are expected to improve price discovery, reduce volatility near market close, and bring Indian practices closer to international standards.
