Stock market new rules: The National Stock Exchange (NSE) will implement revised rules for its pre-open session from Monday, September 7, while retaining the existing session timings.
Under the new framework, the order-entry period will be divided into phases, with market orders restricted during the second phase. The changes are designed to align the pre-open session with the Securities and Exchange Board of India’s (Sebi) introduction of the Closing Auction Session (CAS) in the equity cash market.
The revised norms also seek to improve coordination between the cash and derivatives segments and facilitate a smoother transition in market operations.
Pre-Open Session Order Rules
From September 7, the 15-minute pre-open session, running from 9:00 AM to 9:15 AM, will be divided into phases.
9:00 AM to 9:05 AM: Phase 1 will be conducted from 9:00 AM to 9:05 AM, allowing investors to enter, modify, or cancel both limit and market orders.
9:05 AM to 9:10 AM: Phase 2 will take place from 9:05 AM to 9:10 AM, during which only limit orders can be entered, modified, or cancelled.
9:10 AM to 9:12 AM: The order-matching and trade-confirmation session will now be held from 9:10 AM to 9:12 AM, replacing the existing 9:08 AM to 9:12 AM window. During this session, the opening price will be established, orders will be matched, and trades will be confirmed.
9:12 AM to 9:15 AM: The buffer period from 9:12 AM to 9:15 AM will follow, facilitating a seamless transition from the pre-open session to regular continuous trading.
Securities covered in the new stock market rule?
The new stock market rule is not limited to Futures & Options (F&O) traders. It applies to the pre-open session of the cash or equity market, covering a broader range of securities.
The revised rules will apply to various equity securities, including SME shares, partially paid-up shares, InvITs and REITs, in addition to companies listed on the main board. Therefore, the changes will not be restricted to large-cap or major listed companies. Smaller listed companies and other eligible equity securities will also come under the ambit of the new rules.
NSE is revising its pre-open session framework to align the opening price-discovery process with the new Closing Auction Session (CAS) mechanism introduced in the equity cash market on August 4.
The CAS framework is designed to make the closing price-discovery process more transparent, efficient and robust. It applies to cash-market stocks that have derivative contracts and uses an auction-based mechanism that pools buy and sell orders into a single liquidity pool to determine the closing price.
Disclaimer: This story is for educational purposes only. Please consult with an investment advisor before making any investment decisions.
