Nithin Kamath, founder of Zerodha, has warned that changes in stock market timings from August 3 could reduce brokerage revenues by 1% to 5% and may confuse retail investors. The NSE and BSE will introduce a Closing Auction Session for futures and options stocks, which will change how closing prices are fixed.
The new system will allow investors to place buy and sell orders that match at one price. This will replace the current method where closing prices are based on the average of trades in the last 30 minutes. Trading in F&O stocks will stop at 3:15 pm, followed by the auction session. Non‑F&O stocks will continue trading until 3:30 pm, while stock and index derivatives will remain open until 3:40 pm.
Kamath said Zerodha’s brokerage income may fall by 1% to 5% because trading volumes in the last 15 minutes will reduce. He also noted that different closing times could confuse retail investors and increase customer queries.
Exchanges such as NYSE and LSE already use closing auctions. Experts believe the new system will reduce manipulation of closing prices and help passive funds trade more fairly. Kamath welcomed the benefits but stressed that brokerages must prepare for challenges and explain the changes clearly to investors.