The Securities and Exchange Board of India (SEBI) has implemented a procedural change regarding the settlement of derivatives contracts. Moving forward, the final settlement price for expiring futures and options will no longer incorporate trades that occur during the closing auction period, which takes place in the final 30 minutes of the trading day.

This adjustment is intended to refine the mechanism by which settlement prices are determined, ensuring that the final valuation is not influenced by the specific volatility or liquidity patterns often observed during the closing auction. By excluding this window, SEBI aims to provide a more stable reference point for market participants holding open positions at the time of expiration. This change affects all traders and institutional investors involved in the derivatives market, as it alters the calculation basis for their final contract obligations. The move is part of a broader effort by the regulator to maintain market integrity and reduce the potential for price manipulation or artificial spikes during the transition into the market close.