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SEBI proposes new mechanism to determine stock closing price


Published on 2024-12-06 00:31:08 - MSN
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  • MUMBAI: Instead of the current method of determining the average closing price of a stock through the volume-weighted average price (VWAP), the markets watchdog Securities and Exchange Board of India (SEBI) has proposed an internationally followed practice of close-auction session (CAS) to determine the closing price of a stock.

The Securities and Exchange Board of India (SEBI) has proposed a new mechanism for determining the closing price of stocks to enhance market integrity and reduce manipulation. This new method involves calculating the closing price based on the volume-weighted average price (VWAP) of trades executed in the last half-hour of trading, rather than the price of the last trade. This change aims to reflect a more accurate and fair representation of the stock's value by considering the trading activity over a period rather than a single transaction. The proposal comes in response to concerns about potential manipulation at market close and is part of SEBI's broader efforts to improve market efficiency and transparency. The regulator has invited public comments on this proposal until June 21, 2024.

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