Quorum 15 welcomes the advent of India’s Closing Auction Session (CAS), an important step in the continuing development of the country’s equities market infrastructure.

The 3 August introduction of CAS moves India's primary equities markets - NSE and BSE - from a calculated closing price structure to an executable auction price, determined through concentrated market demand. CAS brings the Indian market more closely in line with established international best practice, and as participation accelerates, should strengthen closing price formation for investors, index funds and other market participants.
Closing auctions are an established feature of global equities market structure and used across much of Asia-Pacific, including HKEX Closing Auction Sessions, Japan's Tokyo Stock Exchange, Singapore Exchange and Australian Securities Exchange. They are also a feature of other major markets, including NYSE and Nasdaq in the US, and UK's LSEG.

Quorum 15 has been an active supporter and contributor to the development of this reform. A dedicated Q15 Closing Auction Executive Committee (ExCom), formed of senior executives from global firms with APAC-specific oversight, met regularly from January 2024, leveraging global and regional market structure analysis to provide input and feedback to SEBI throughout the development and consultation process. (Several ExCom members contributed previously to the successful reintroduction of the HKEX closing auction mechanism).

Commenting on the India CAS initiative, Mike Burton, Q15 founder said: "We are delighted and honoured to have been able to contribute to this important structural shift in India's equities markets. Critically, throughout the consultation process, SEBI demonstrated a pragmatic, data-driven approach, carefully considering a wide range of perspectives before finalising the framework. That openness to evidence and industry feedback has been instrumental in bringing this reform to fruition. The introduction of CAS should be viewed as the beginning of a journey rather than the final destination.”

"Once CAS is established, we're confident that it will deliver significant efficiencies and benefits to India’s equities market participants. Experience from other markets shows that auction participation and liquidity build progressively over time as investors, intermediaries and technology providers adapt processes and behaviours. We are confident that as adoption grows, CAS will deliver significant benefits in closing price formation, execution quality and market efficiency for all participants."

Greater market participation is critical to unlocking the full benefits of the CAS mechanism. International experience demonstrates that deeper auction liquidity attracts further participation, creating a virtuous cycle that strengthens price discovery and execution efficiency.

Ongoing engagement between SEBI, exchanges and market participants, supported by transparent data and evidence-led review, will be essential to accelerating adoption and ensuring CAS achieves its long-term potential in one of the world's fastest-growing equity markets.

Quorum 15 congratulates SEBI, NSE and BSE on this important milestone in the evolution of India's financial market infrastructure. We especially commend SEBI's leadership, openness to industry engagement and pragmatic, evidence-led approach throughout the consultation and implementation process. The successful launch of CAS demonstrates the value of constructive collaboration between regulators, exchanges and market participants in advancing market structure for the benefit of all investors.