New stock market timings from August 3: F&O trading extended till 3:40 pm

The Securities and Exchange Board of India's (Sebi's) revised trading framework comes into effect on August 3, introducing a Closing Auction Session (CAS) for F&O-eligible stocks, extending equity derivatives trading by 10 minutes and revising pre-open session timings.

According to Sebi, the changes are aimed at improving price discovery, enhancing market efficiency and aligning India's market structure with global practices.

Under the revised framework, regular trading for F&O-eligible (Category I) stocks in the equity cash segment will continue until 3:15 pm, followed by a five-minute transition period until 3:20 pm.

The Closing Auction Session will then begin with CAS Order Entry I from 3:20 pm to 3:25 pm, followed by CAS Order Entry II from 3:25 pm to 3:30 pm. During the second order entry phase, market orders cannot be modified or cancelled. Sebi has also provided for a random closure of the auction within the final two minutes of this phase.

Order matching will take place from 3:30 pm to 3:35 pm, after which the auction-discovered price will become the official closing price for F&O-eligible stocks.

The revised framework does not change trading hours for non-F&O equity cash stocks. Trading in these stocks will continue until 3:30 pm, as before.

Sebi has also extended trading hours for the equity derivatives (F&O) segment by 10 minutes. From August 3, trading in the segment will continue until 3:40 pm, while timings for all other market segments remain unchanged.

The regulator has also revised the pre-open session. Under the new schedule, the order entry period will run from 9:00 am to 9:07 am, followed by order matching from 9:07 am to 9:15 am. The regular trading session will continue to commence at 9:15 am.

According to Sebi, the Closing Auction Session has been introduced to ensure a fair and transparent closing price through an auction mechanism.

The regulator said the move is aimed at improving trade execution, reducing tracking errors for passive funds, and bringing India's markets in line with global standards.