# Why brokers see little retail appetite for closing auction session — retained record > Retained news record from news:india-mint-markets. Canonical: https://highsignal.app/data/records/318516e4b19c48f4 [← sources](https://highsignal.app/data) source: [news](https://highsignal.app/data/news) (news:india-mint-markets) published 2026-08-27 06:19 ingested 2026-08-27 13:05 [original source ↗](https://www.livemint.com/market/stock-market-closing-auction-brokers-retail-investors-sebi-cas-11787803119833.html) ## retained text ``` Retail investors deterred by weak liquidity, unpredictable prices and a lack of clear incentives may not flock to the new market closing auction session (CAS) anytime soon, stock brokers said, despite the market regulator's efforts to bring more of them into the new framework. Brokers offered varying estimates of retail participation in the new system, but all of them pegged it at below 10% of total participation. They also expect this share to have moved only marginally since CAS debuted on 3 August. “Retail participation in CAS is unlikely to increase substantially since the segment is not of particular interest to them. A retail participant has six hours to trade during the day. There is no particular reason why they would be interested in participating in an auction,” a broking official said on condition of anonymity. Under the new framework, continuous cash market trading ends at 3:15pm for 213 derivative-traded stocks covered by CAS. This is followed by the closing auction, with order entry beginning at 3:20pm and the session closing randomly between 3:28pm and 3:30pm. Order matching takes place from 3:30pm to 3:35pm. The new system is designed to determine a single price at which the maximum number of pooled orders for a stock can be matched. Auction orders can be placed within a ±3% range around a volume-weighted reference price derived from trading between 3pm and 3:15pm. However, price movements during the auction have made it difficult for retail investors to assess where stock prices will settle. “Clients will participate if there is a commercial advantage or else they are likely to stay away. Eventually, people will try to participate, but not in the short term. If there is volatility and they are not able to gauge prices, people will not participate,” a second broker said. Meanwhile, the Securities and Exchange Board of India (Sebi) has been attempting to bring retail participants onto CAS. The regulator has asked brokers to display the reference auction price upfront on their trading apps to improve transparency of prices for traders, with the hope that an attractive price could entice retail participants. A query emailed to Sebi remained unanswered. Mint had reported on 4 August that the market regulator had asked brokers to encourage greater retail participation in CAS, amid concerns over sharp price swings and liquidity during the market’s final minutes of trading. Price uncertainty The concern over price discovery in the auction session has remained consistent since its debut. On 26 August, the Nifty slumped 271.4 points within 30 seconds after the auction order session opened at 3:20pm. The index fell to 24,005.5 from its reference rate of 24,276.9 released at 3:15pm. It later recovered to close at 24,207.75, 0.28% below the reference rate by 3:30pm. Mint reported that the sharp movement could be attributed to a bid placed 3% below the reference rate for Bharti Airtel, which recorded the highest volumes during CAS. While the order was within Sebi’s permitted range, market participants were puzzled that it went through. A similar episode occurred on CAS’s first day in the Indian stock market. On 3 August, the Nifty surged 1.6%, while the Sensex gained only 0.7%, an unusually wide difference between the two benchmark indices. The Nifty also saw a nearly 200-point surge in the final two minutes of order closing, creating a gap between the index and its underlying stocks as well as their futures. The pricing discrepancy was attributed to the absence of participants such as arbitrageurs, who take advantage of price gaps between the same stock traded on two exchanges. The lack of liquidity and demand-supply mismatches are also discouraging retail investors, brokers said. “Retail participation right now is at the lower end, somewhere close to 3-5%. This is unlikely to move substantially as of now. Due to demand and supply constraints, one may not be able to sell and buy as they want during the closing auction,” a third broker said. Most traders are currently placing their orders before 3:15pm because of uncertainty around price discovery during CAS, another broker added. “So far, most traders including retail are putting in their trades before 3:15pm as price discovery during the closing auction has faced some uncertainty and unpredictability so far,” the broker said. There is little reason for a retail investor to participate unless there is market-moving news after 3:15pm, he added. The value of trades in NSE's closing auction has declined since its debut. Transactions stood at ₹1,085.13 crore on 26 August, down 15% from ₹1,276.38 crore on 3 August. Trading volume has fallen 23.7% over the same period to 19,757,074 trades. “CAS is a new system and will naturally take some time to develop. As more brokers enable retail clients to participate and place orders in the session, liquidity should gradually improve, helping make price discovery more stable and the overall system more robust alongside institutional participation,” said Raj Shah, executive director at EPP Securities. Sebi, however, expects retail participation to improve as awareness of the closing auction increases. “The regulator is of the view that gradually, when awareness of the closing auction will increase, retail participation in the segment will also increase,” a regulatory official said. Greater retail participation would bring volume to the auction sessions and help address low liquidity and price swings, the official added. ``` document fetched 2026-08-27 13:05 · canonical https://livemint.com/market/stock-market-closing-auction-brokers-retail-investors-sebi-cas-11787803119833.html