Which of the following best describes the primary purpose of the Closing Auction Session (CAS) introduced by SEBI?

To replace the Volume-Weighted Average Price (VWAP) method for determining closing prices

To mandate that all trades must be executed only through automated algorithmic systems

To increase the volatility of stocks during the final hour of trading

To eliminate the role of stock exchanges in price discovery

Daily

250 words

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Rating

18 August 2026

Closing Auction Session (CAS) mechanism

The Closing Auction Session is a specific regulatory intervention by SEBI, a statutory body, representing a significant structural change in the Indian securities market microstructure.

Notes

SEBI has introduced the Closing Auction Session (CAS) mechanism to determine closing prices in the stock market.
The CAS replaces the previous Volume-Weighted Average Price (VWAP) method for calculating closing prices.
The primary objective of CAS is to provide a single, unified price for trade execution, thereby reducing tracking errors.
SEBI maintains that the CAS is a permanent structural change, though it remains open to feedback and potential refinements to address implementation issues.
Initial challenges in adoption are attributed to market participants relying on legacy systems designed for the VWAP-based mechanism.
SEBI views the transition as a major microstructure change in the Indian securities market.

Part of a longer story

This is day 1 of 3 in SEBI Closing Auction Session Implementation, which has been running since 18 August 2026. Reading it whole is usually worth more than reading today alone — the exam asks how something developed.

Questions

Discuss the significance of microstructure changes in the Indian securities market, with specific reference to the transition from Volume-Weighted Average Price (VWAP) to the Closing Auction Session (CAS) mechanism. 150 words

Attempt this — 150 words in 8 min

0 / 150 words 8:00
The Securities and Exchange Board of India (SEBI) plays a critical role in enhancing market integrity and efficiency. In this context, analyze how the implementation of new trading mechanisms like the Closing Auction Session (CAS) addresses systemic challenges such as tracking errors and legacy system dependencies in the Indian financial markets. 250 words

Attempt this — 250 words in 11 min

0 / 250 words 11:00

Prelims

Which of the following best describes the primary purpose of the Closing Auction Session (CAS) introduced by SEBI?

Syllabus

Government policies and interventions GS2

Topics

Sources

CAS here to stay, but open to review for improvement: SEBI

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