Under the proposal, exchanges would use the closing price from the actively traded exchange to determine price bands and pre-open auction base prices in such cases. | Photo Credit: HEMANSHI KAMANI
Markets regulator SEBI on Thursday proposed a mechanism to harmonize the base price used for pre-open call auctions and price bands for stocks listed on multiple exchanges to address price divergence arising from non-trading on one or more platforms.
In a consultation paper, SEBI said it has observed instances in certain illiquid stocks where non-trading on one exchange and continued trading on another have led to significant divergence in closing prices across exchanges.
The regulator noted that stock exchanges currently apply scrip-wise price bands independently based on their respective previous-day closing prices.
However, there is no mechanism to adjust price bands on exchanges where no trading takes place, resulting in progressive divergence in prices of the same stock.
According to SEBI, such divergence may also increase the possibility of a stock remaining non-traded on one of the exchanges.
To address the issue, the regulator has proposed that if a stock trades on all exchanges or remains non-traded across all exchanges on the previous day, each exchange should continue to use its respective latest closing price for determining the subsequent day’s price bands.
“In respect of scrips where there was trading only at one of the exchanges, then the other exchanges shall consider the closing price of the exchange where the scrip was traded for fixing the price bands and base price for the pre-open call auction session on the subsequent day,” SEBI said.
Further, if a stock trades on two or more exchanges, but remains non-traded on one or more exchanges, SEBI proposed that exchanges where no trading occurred would adopt the closing price from the exchange that recorded the highest trading volume in that stock for determining the subsequent day’s price bands and pre-open base price.
SEBI has also proposed that stock exchanges enter into necessary agreements or make suitable arrangements for sharing closing-price data to facilitate the smooth implementation of the framework.
The Securities and Exchange Board of India (SEBI) has sought comments till July 2 on the proposals.
Published on June 11, 2026