Archive · 29 Jul 2026
Zerodha Warns of Revenue Impact from New Stock Market Rules
Starting August 3, India's stock market will introduce a new system called the Closing Auction Session (CAS) for stocks with futures and options (F&O) contracts.
This change will make the market more complex for investors and might reduce the revenue of brokerages like Zerodha by 1% to 5%.
The CAS will determine a single closing price for these stocks through an auction mechanism, which is already used by major global exchanges like the NYSE and LSE.
While this new system aims to make the market fairer and more efficient, it will also require brokerages to help customers understand the new staggered closing times for different market segments.
The Closing Auction Session (CAS) will be introduced by NSE and BSE for stocks with F&O contracts starting August 3.
Zerodha's CEO Nithin Kamath warns the change could reduce brokerage income by 1% to 5% and increase customer queries.
The CAS will determine a single closing price for eligible stocks through an auction mechanism, similar to global exchanges like NYSE and LSE.
The new system aims to address issues like price manipulation and tracking errors for passive funds.
Different market segments will now close at different times, with F&O stocks ending continuous trading at 3:15 PM, non-F&O stocks at 3:30 PM, and derivatives at 3:40 PM.
- Who
- Nithin Kamath, Zerodha co-founder and CEO
- What
- Introduction of the Closing Auction Session (CAS) by NSE and BSE
- When
- August 3
- Where
- India
- Why
- To address issues like price manipulation and tracking errors for passive funds
Brokerage Industry Concerns
Market Structure Benefits
Revenue Impact
Brokerage Industry Concerns
The new Closing Auction Session (CAS) could reduce Zerodha's brokerage income by 1% to 5%, increasing customer queries due to different market closing times.
Market Structure Benefits
The CAS aims to address issues like price manipulation and tracking errors for passive funds, improving market fairness.
Operational Complexity
Brokerage Industry Concerns
Brokerages like Zerodha will face challenges in explaining the new staggered closing times to retail investors.
Market Structure Benefits
The CAS aligns with global practices, such as those used by the NYSE and LSE, enhancing market efficiency.
- Effective Date
- August 3
- Affected Instruments
- Stocks with F&O contracts
- New Closing Time for F&O Stocks
- 3:15 PM
- New Closing Time for Non-F&O Stocks
- 3:30 PM
- New Closing Time for Derivatives
- 3:40 PM
- Potential Revenue Impact on Zerodha
- 1% to 5%
- Global Precedents
- NYSE, LSE