Chequered flag is waved at the observation post near the control line at the end of each session to signal the end of the session. Chequered flag is accurately called the black and white chequered flag.
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Regulations
Operation during the free practice and the qualifying session
In free practice and qualifying session, chequered flag is waved at the end of the session. Cars that received the chequered flag must drive safely and enter the pit at the end of the lap.
Operation during the race
In the race, chequered flag is waved when the leading car completed the predetermined lap.
In case the end of the race is specified by time, the lap after the specified time will be a last lap. And when the leading car completes this lap, chequered flag will be waved.
In the race, chequered flag is always waved from the top car. Chequered flag is not waved from cars other than the top.
If chequered flag was waved by mistake before completing the race lap, the race would end at the time chequered flag is waved.
Double chequer
Cars that is waved chequered flag must enter the pits at the end of that lap. If it continued driving without entering the pit, the driver would be penalized as a double chequer.
It is called a double chequer because it is waved the chequered flag twice.
It may endanger other cars or course marshals during course cleaning. It is also a serious violation because it hinders the progress of subsequent races.
Cars that through the control line at the same time as chequered flag is waved are judged to be difficult to visually confirm chequered flag, so this case is not treated as a violation.
However, the lap time recorded in the last lap after the chequered flag is treated as the time recorded after the end of the session. Therefore, basically it invalid the lap time and it is not accepted.
Operation differs depending on the race category, but race control notifies team of the car number of the leading car which received chequered flag using radio or text information on timing screen.
Team transmits to the driver this information using team radio.
So even if it is difficult to visually check the checkered flag, it is consider to prevent a double chequer.
In case chequered flag is waved mistakenly
In case chequered flag is waved mistakenly during the race, the race ends at this point, even if the predetermined number of laps does not complete.
In 2014 Formula 1 Chinese Grand Prix, chequered flag was waved one lap earlier than the predetermined number of laps due to marshal’s mistake, so the race ended with one less lap.
If chequered flag was not waved mistakenly, the race would end when the predetermined number of laps completed.
(10 December 2019)
2.5.4.1 c) Black and white chequered flag
This flag should be waved and signifies the end of a practice session or the race.