SEBI Revises CAS Timings and F&O Settlement: Key Changes

SEBI has changed some rules for the Closing Auction Session (CAS), the short period used to decide the official closing price of certain shares. The changes will take effect on 7 December 2026. CAS will now run from 3:30 PM to 3:40 PM on every trading day.

The regulator has also changed how the final settlement price of expiring futures and options (F&O) contracts is calculated. Instead of using the closing auction price, exchanges will return to using the average price of trading during the last 30 minutes of the normal cash-market session. This is called the volume-weighted average price, or VWAP.

Here is a simple explanation of the new timings, what orders traders can place, when F&O trading stops and which rules will come into force later.

New CAS and F&O Timings: Quick Guide

1. What Is CAS and When Will It Run?

CAS stands for Closing Auction Session. In simple terms, it is a short auction after regular share trading ends. Buy and sell orders are collected and matched to arrive at an official closing price for the shares covered by CAS. Under the revised SEBI rules, this session will take place from 3:30 PM to 3:40 PM every trading day. The auction price is used for the relevant shares in the cash market, but it will no longer be the price used to settle expiring F&O contracts.

2. What Can Traders Do During the 10-Minute CAS?

Between 3:30 PM and 3:31 PM, the exchange will work out a starting reference price and move eligible pending orders from normal trading into the auction, subject to the applicable rules. From 3:31 PM to 3:36 PM, traders may place, change or cancel both limit and market orders. A limit order lets you choose a price; a market order does not specify a price. From 3:36 PM, traders can place, change or cancel limit orders only. Market orders cannot be placed, changed or cancelled in this period. The order-entry window will close at a random time between 3:38 PM and 3:40 PM. After it closes, the exchange will match orders to determine the closing price. New iceberg and stop-loss orders are not allowed during CAS.

3. Will Futures and Options Trade Until 3:45 PM?

Yes, in most cases. On a normal trading day, both index F&O and stock F&O will trade until 3:45 PM. The exception comes on an index contract’s expiry day: that expiring index contract will stop trading at 3:30 PM. Stock F&O will continue until 3:45 PM, even on its expiry day. For example, if a Nifty index option expires today, trading in that expiring contract will end at 3:30 PM, not 3:45 PM. A separate cash-market post-close session will run from 3:50 PM to 4:00 PM, at the official closing prices.

4. How Will the Final F&O Settlement Price Be Decided?

For contracts that expire that day, SEBI is bringing back the VWAP method. VWAP means an average trading price that gives more weight to trades with higher volumes. For an index contract, such as Nifty, the final index value will be calculated using the VWAP of the shares that make up the index between 3:00 PM and 3:30 PM. For stock F&O, settlement will use the underlying share’s VWAP over the same 30-minute period, taking trading across stock exchanges into account. Exchanges will also show indicative VWAP-based values live during this period. Put simply, F&O expiry settlement will depend on trading between 3:00 PM and 3:30 PM, not the later 3:30 PM–3:40 PM closing auction.

5. What Happens to Pending and Iceberg Orders?

This part starts later, on 8 February 2027. Under the revised rules, eligible limit orders left unexecuted at 3:30 PM will move to CAS automatically. Stop-loss orders and orders priced outside the CAS price limits will not move. An iceberg order is a large order shown to the market in smaller parts. If an eligible iceberg order remains pending, it will move into CAS as a normal limit order showing its full remaining quantity, unless the trader chose not to carry it forward when placing the order. Traders cannot place fresh iceberg orders during CAS. SEBI also sets rules for which carried-forward orders get priority. These changes relate to how pending orders move into CAS; they are not part of the 7 December 2026 rollout.

6. What Should Traders Remember?

There are two main dates: 7 December 2026 for the new auction timings, F&O trading hours and expiry settlement method; and 8 February 2027 for the revised treatment of pending limit and iceberg orders. Keep an eye on the 3:30 PM cut-off if you trade index options on expiry day. If you use limit or market orders in CAS, remember that the allowed actions change at 3:36 PM and the session may close anytime after 3:38 PM. For applicable shares, the CAS reference price is based on trading during the last 15 minutes of the normal cash session; it is only a starting point for the auction, not necessarily the final closing price.

Conclusion

SEBI’s updated rules make the closing process easier to separate into two parts. The 3:30 PM–3:40 PM auction will decide the closing price of shares covered by CAS, while expiry-day F&O settlement will return to the VWAP of trading from 3:00 PM to 3:30 PM. Traders should check the new order-entry windows and cut-off times before 7 December 2026. The separate pending-order changes will follow on 8 February 2027.