On August 3, India introduced the closing auction session (CAS) mechanism, a market structure reform aligned with global standards. For stocks with derivatives, the final daily price is no longer calculated using a 30-min volume-weighted average. Instead, all orders placed between 3.20 pm and 3.30 pm are pooled, and a single closing price is established based on the point where the highest volume clears.
Closing auctions lower trading costs, sharpen price discovery, and make raising capital cheaper for companies. Key to making the mechanism effective, however, is broad participation, which is voluntary.
