The Securities and Exchange Board of India (SEBI) has announced a regulatory modification concerning stock futures trading parameters, specifically addressing price band alignment during extended trading hours.

New Price Band Alignment Framework

The market regulator has established that stock futures price bands will match the Call Auction Session (CAS) price bands during a designated time period. This alignment will be effective from 3:15 PM to 3:40 PM, creating uniformity between the two trading mechanisms during this specific window.

Regulatory Impact

This regulatory change represents a harmonization effort between different trading segments, ensuring consistent price band parameters across stock futures and Call Auction Session mechanisms during the specified timeframe. The alignment affects the price discovery mechanism and trading parameters for market participants operating in both segments during the designated period.

The modification demonstrates SEBI's ongoing efforts to streamline trading mechanisms and create consistency across different market segments, particularly during extended trading hours when both systems operate simultaneously.

The Securities and Exchange Board of India (SEBI) has introduced new price band restrictions for stock trading during Call Auction Sessions (CAS), setting limits of plus or minus 3% from reference prices. This regulatory framework aims to enhance market stability and provide structured price discovery mechanisms during these specific trading periods.

Price Band Implementation

The new regulations establish clear parameters for stock price movements during Call Auction Sessions. The following table outlines the key specifications:

Market Impact and Structure

Call Auction Sessions represent specific trading periods where orders are collected and matched at predetermined intervals rather than continuous trading. The implementation of ±3% price limits during these sessions creates a controlled environment for price discovery while maintaining market liquidity.

The price band mechanism serves multiple regulatory objectives:

• Volatility Control: Prevents excessive price swings during auction periods
• Market Stability: Ensures orderly price formation processes
• Investor Protection: Reduces potential for extreme price movements
• Liquidity Management: Maintains trading activity within defined parameters

Regulatory Framework

SEBI's decision to implement these price limits reflects the regulator's commitment to maintaining fair and efficient market operations. The ±3% threshold provides sufficient flexibility for natural price movements while preventing disruptive volatility that could impact market integrity.

This measure aligns with SEBI's broader regulatory mandate to protect investor interests and ensure transparent price discovery mechanisms across Indian capital markets. The implementation demonstrates the regulator's proactive approach to market supervision and risk management.