Markets
NSE Changes Pre-Open Market Rules From September 7: What Traders Need to Know
The revised 9 am to 9:15 am session changes order-entry windows and gives greater focus to price-time priority during matching The National Stock Exchange (NSE) has introduced revised rules for its pre-open auction session from September 7, changing how orders are entered, modified, cancelled and matched before regular trading begins. The overall pre-open session remains unchanged at 9:00 am to 9:15 am. However, the 15-minute window is now divided into specific stages for order entry, limit-order activity, order matching and the transition to normal trading. The revised system applies to stocks in the equity cash market, including SME securities, InvITs and REITs, as well as the derivatives segment.
First Five Minutes Become Important
Under the revised system, the first order-entry period runs from 9:00 am to 9:05 am.
During this five-minute window, market participants can place both market and limit orders. They can also modify or cancel these orders.
Earlier, the order-entry period ran from 9:00 am to 9:08 am, allowing these activities throughout the eight-minute window.
The shorter initial window means traders may need to act earlier, particularly when markets are responding to major overnight developments, sharp global moves or significant company-specific news.
Limit Orders Get a Separate Window
The second phase runs from 9:05 am to 9:10 am.
During this period, fresh limit orders can be entered, while existing limit orders can also be modified or cancelled. However, market orders cannot be modified or cancelled during this window.
The system may also randomly stop the order-entry period during the final two minutes of the scheduled window.
Under the earlier system, order entry, modification and cancellation activities were permitted from 9:00 am to 9:08 am without the same separation between market and limit orders.
Order Matching From 9:10 am
The third phase, from 9:10 am to 9:12 am, is dedicated to order matching and trade confirmation.
No fresh orders can be entered, modified or cancelled during this period. The opening price for a stock is determined through the equilibrium price mechanism.
Market buy and sell orders are first matched against each other based on time priority at the equilibrium price.
Any eligible market orders left unmatched are then matched with limit orders based on price-time priority. Remaining limit orders are subsequently matched with other limit orders using the same price-time priority principle.
This gives importance to both the price of an order and the time at which it was placed.
Buffer Period Remains Unchanged
The final three minutes, from 9:12 am to 9:15 am, continue to serve as the buffer period.
This period allows the market to transition from the pre-open auction to the regular continuous trading session.
There is no change to this part of the market-opening process.
How Is the Opening Price Decided?
The opening price is determined through the demand-supply mechanism, known as the equilibrium price.
The equilibrium price is the level at which the maximum volume of orders can be executed.
If more than one price allows the same maximum executable volume, the price with the minimum order imbalance is considered.
If multiple prices still meet these conditions, the price closest to the previous trading day’s closing price is selected as the equilibrium price.
What Does the Change Mean for Traders?
The revised structure makes the pre-open process more segmented and places greater emphasis on when and at what price orders are entered.
For traders, the biggest change is the reduction of the initial order-entry period from eight minutes to five minutes. Market orders also receive different treatment after 9:05 am, as they cannot be modified or cancelled during the second phase.
The revised matching process could make price-time priority more important in determining which eligible orders are executed.
Overall, the NSE’s revised pre-open auction is aimed at making opening price discovery more structured while reducing last-minute market-order activity before regular trading begins.
Markets
SEBI Looks to Ease Commodity Market Rules to Improve Liquidity
The Securities and Exchange Board of India (SEBI) is examining position limits for non-agricultural commodity contracts as it looks to improve liquidity and market depth without weakening risk controls.
SEBI Chairman Tuhin Kanta Pandey said the regulator is also working on several other issues that could make India’s commodity derivatives market more efficient.
What are position limits?
Position limits restrict how large a position a market participant can hold in a particular commodity contract. Such limits are designed to prevent excessive concentration and reduce the risk of market manipulation. However, limits that are too restrictive can also make it harder for contracts to attract enough participants and trading activity.
SEBI is therefore examining whether the existing limits for non-agricultural contracts can be adjusted to help these markets gain greater depth. Pandey said the objective is to allow contracts to grow while maintaining appropriate risk controls.
SEBI looks at physical settlement rules
SEBI is also examining how commodity contracts are settled.
Pandey said that in some agricultural commodities, requiring physical settlement from the beginning can make it harder for a contract to develop.
A phased approach could allow contracts to mature before physical settlement becomes mandatory, he said.
SEBI has completed consultations on the issue and guidelines are expected to follow.
GST issues also under discussion
The regulator is engaging with stakeholders on GST-related issues affecting participants who give or receive commodities through exchange platforms.
The aim is to reduce structural friction that can make participation in commodity markets more difficult.
SEBI’s broader focus is on creating markets that can attract producers, commercial users, processors, farmers and other participants while maintaining market integrity.
Why does commodity-market liquidity matter?
A deeper market generally means more buyers and sellers are available to trade.
For businesses that use commodities as part of their operations, a liquid derivatives market can help them manage price risks. This includes physical hedgers who use contracts to protect themselves against changes in commodity prices.
Pandey said technology can improve access and efficiency, but technology used in commodity markets must reflect the needs of producers, farmers, processors, commercial users and physical hedgers.
SEBI wants more investor awareness
SEBI also plans to strengthen investor awareness through Project Jagrook.
The initiative will focus on educating farmers, farmer producer organisations (FPOs), MSMEs, hedgers and other users about commodity derivatives.
Pandey stressed that greater access to financial markets is not enough if participants do not understand how the products work.
For smaller businesses and farmers, this is particularly important because commodity derivatives can help manage price risk but also carry risks that participants need to understand.
More participation in cash and derivatives markets
SEBI is also working towards deeper and more liquid cash markets.
According to Pandey, wider participation, stronger securities borrowing and lending and more efficient hedging and arbitrage could improve price discovery.
Better interaction between cash and derivatives markets could also help market participants manage risks more efficiently.
However, SEBI has stressed that simpler regulation should not mean weaker compliance.
Controls around client funds, margins, reporting and supervision will remain important, with market trust and integrity continuing to be key priorities.
Foreign investors get a role in commodity derivatives.
The developments follow a recent SEBI board decision to allow foreign portfolio investors (FPIs) to participate in physically settled, non-agricultural commodity derivative contracts, subject to safeguards.
The move could bring wider participation to India’s commodity derivatives market.
For the common investor and businesses, SEBI’s latest approach is aimed at balancing two objectives: making commodity markets deeper and easier to use while ensuring that stronger participation does not come at the cost of market safety and investor protection.
Markets
SEBI Allows PMS Investors to Look Abroad, But RBI Rules Still Apply
The question of how much Indian money can move overseas is a matter for the Reserve Bank of India (RBI), not the Securities and Exchange Board of India (SEBI), SEBI Chairman Tuhin Kanta Pandey said on Wednesday. His comments came days after SEBI’s board approved new regulations allowing portfolio managers to invest client funds in specified overseas securities. Speaking at the annual conference of the Association of Portfolio Managers in India (APMI), Pandey was asked whether the new permission could result in more Indian money moving abroad. He said the amount that can move overseas and the route through which it can be sent must follow the Liberalised Remittance Scheme (LRS) and the Foreign Exchange Management Act (FEMA) rules.
What has SEBI changed?
SEBI’s board approved the SEBI (Portfolio Managers) Regulations, 2026 on September 24.
The new regulations allow discretionary and non-discretionary portfolio managers to invest in specified overseas securities.
These include:
- – Listed equity and debt
- – Real Estate Investment Trusts (REITs)
- – Overseas mutual funds
- – Exchange-traded funds (ETFs)
- – Index funds
- – Foreign government debt
However, the permission remains subject to FEMA and RBI’s LRS framework.
This distinction is important. SEBI’s permission allows portfolio managers to make certain overseas investments, but it does not independently determine how much money can leave India.
Pandey did not specify how the limits would apply to overseas allocations by PMS clients and referred that question to the RBI.
Why does this matter to Indian investors?
For investors using portfolio management services (PMS), the regulatory change could provide access to a wider range of overseas investments.
But the ability to invest abroad does not mean investors can freely transfer unlimited amounts of money overseas.
The applicable limits and foreign exchange rules continue to matter. The Moneycontrol report notes that overseas investments under the new PMS framework remain subject to the RBI’s LRS and FEMA requirements.
For an ordinary investor, the key point is that SEBI regulates the investment product and intermediary, while RBI’s foreign exchange framework determines the applicable limits for money moving overseas.
SEBI and RBI working on faster FPI registration
Pandey also said SEBI and the RBI are working to make registration for Foreign Portfolio Investors (FPIs) faster and more digital.
The RBI is looking at allowing FPI registration documents to be uploaded through SWIFT, according to Pandey.
SEBI has already introduced several measures aimed at simplifying the process, including:
- A revamped NSDL front end
- India Market Access portal
- A common application portal with tracking
- Digital signatures instead of physical signatures
- E-power of attorney
Pandey said these measures can reduce the need for processes such as notarisation, apostille and consularisation.
What about India’s market performance?
Pandey was also asked about the recent decline in the Indian market compared with markets in Japan and South Korea.
He said decisions about where investors should put their money are for investors to make and that it would not be appropriate for regulators to comment on such investment choices.
He instead pointed to the regulators’ focus on making FPI registration easier.
SEBI also flags issue of inactive listed companies
Pandey also addressed concerns about listed companies that have little or no visible business activity.
He said stock exchanges have a continuing responsibility to monitor companies after listing. Where a company is not physically present or carrying out economic activity, delisting provisions are available.
He also said physical verification by exchanges is feasible and stressed that the process should be followed properly so investors can have confidence that listed companies are genuine.
The common investor takeaway
The latest change does not mean SEBI has opened an unrestricted route for Indian money to move overseas.
SEBI has allowed portfolio managers to invest in specified foreign securities, but those investments remain subject to the RBI’s foreign exchange framework and FEMA rules.
So, for investors, the important distinction is simple: SEBI decides what regulated portfolio managers can invest in, while the RBI’s rules govern the broader framework for moving money abroad.
Source: Moneycontrol
Markets
STT Collections Surge 53% to Rs 40,214 Crore in FY27 After Rate Hike
Higher securities transaction tax rates have boosted collections, even as regulatory changes put pressure on derivatives trading volumes. Collections from the Securities Transaction Tax (STT) rose nearly 53 per cent to Rs 40,214.36 crore in 2026-27, as of September 17, compared with Rs 26,305.72 crore during the corresponding period a year earlier.
The sharp increase follows a hike in STT rates that came into effect on April 1, after being announced in the Union Budget. The tax is levied on securities transactions carried out on recognised stock exchanges.
STT rates increased
The government raised STT rates on derivatives transactions from April 1.
- Futures: The rate increased to 0.05 per cent of the traded value, from 0.02 per cent earlier.
- Options premium turnover: The rate rose to 0.15 per cent, from 0.1 per cent.
- Exercised options: The levy increased to 0.15 per cent of the intrinsic value, from 0.125 per cent.
This was the second STT rate hike by the government since 2024.
Deven Choksey, managing director at DRChoksey FinServ, said the increase in collections was primarily driven by the higher tax on derivatives transactions. He said the revised rates allowed the government to collect more revenue from each contract traded.
Choksey also noted that despite regulatory measures introduced by the Securities and Exchange Board of India (SEBI), including larger contract sizes and stricter position limits, overall market transaction values remained high.
Collections rose from previous financial years.
STT collections have increased over the past two financial years.
In FY26, total collections stood at Rs 57,522 crore, compared with Rs 53,296 crore in FY25.
For FY27, the government has projected STT collections of Rs 73,700 crore.
What is STT and how is it charged?
STT is a direct tax imposed on securities transactions conducted on recognised stock exchanges. It applies to trades involving equities, futures and options, as well as equity-oriented mutual funds.
The tax is generally charged on sell transactions in futures and options. For futures, the taxable value is based on the actual traded price, while options transactions are taxed on the premium. When an option is exercised, STT is levied on the settlement price of the day if the contract is in the money.
Collections typically move in line with trading activity and transaction values, which are linked to conditions in the secondary market.
Derivatives volumes face regulatory pressure.
While STT collections have increased, derivatives trading volumes have come under pressure over the past month.
The Business Standard report attributes this pressure to regulatory changes, including the introduction of a closing auction session and a requirement for 100 per cent collateral, among other measures.
The higher tax rates and regulatory changes are therefore affecting different aspects of the market: the tax increase has raised the amount collected per transaction, while new trading requirements have added constraints to derivatives activity.
Brokers asked to remit unpaid STT.
Earlier in March, the Income Tax Department asked stockbrokers to remit STT collected from clients for FY24 and previous years, along with interest, if the amounts had not been deposited into the government account.
The department’s direction concerned tax already collected from clients but not paid to the government.
The rise in STT collections reflects the impact of higher tax rates alongside continued transaction activity. However, the figures alone do not establish whether trading volumes have increased, since the higher levy also means more tax can be collected on each eligible transaction.
This article is for informational and educational purposes only and should not be treated as investment advice. Investors should assess their own financial circumstances and consult a SEBI-registered investment adviser before making investment decisions.
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