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

The Securities and Exchange Board of India (SEBI) on Thursday proposed a uniform mechanism to determine price bands and pre-open session base prices for stocks listed on multiple exchanges, to address instances of significant price divergence in illiquid securities.

The regulator has proposed that where a stock trades on only one exchange on a given day, the other exchange should use the closing price of the exchange where trading occurred to determine the next day’s price band and the base price for the pre-open call auction session.

Further, where a stock trades on two or more exchanges but remains inactive on one or more of them, the non-trading exchange would use the closing price of the exchange with the highest trading volume for that stock to determine the subsequent day’s price band and pre-open base price.

Price alignment

Currently, stock exchanges apply stock-specific price bands of up to 20 per cent on either side of the previous closing price for stocks not traded in the derivatives segment. Some stocks trade on one exchange but not another for several days, leading to widening differences in closing prices because exchanges apply price bands based on their own previous-day closing prices.

This has been observed particularly in illiquid scrips where persistent buying interest, coupled with non-trading on one exchange, can result in “significant price divergence in the closing prices of the scrips across the exchanges,” SEBI said.

However, if the stock trades on all exchanges or does not trade on any exchange, each exchange will continue to use its latest closing price to set price bands.

The regulator has invited public comments on the proposals until July 2.

For implementation, SEBI has also proposed that stock exchanges enter into agreements or other arrangements to share closing-price data.

Published on June 11, 2026