Sebi rejects NSE proposal to extend trading hours as brokers protest
May 7, 2024
Synopsis
Sebi rejects NSE's proposal to extend trading hours for index derivatives. NSE CEO indicates shelving due to lack of broker feedback.
Markets regulator Sebi has rejected stock exchange NSE's proposal to extend trading hours for index derivatives as brokers have protested against the move.
"Currently, there is no plan to extend the timings as SEBI has returned our application because the stock brokers have not provided the feedback that SEBI wanted," NSE CEO Ashishkumar Chauhan said in a post-earnings analyst call.
"So, as of now, the extended time frame (plan) is shelved," he said.
Stock exchanges have the power to extend trading in the F&O segment till 11:55 pm and in the cash segment till 5 pm, but need Sebi's nod. Trading on both platforms ends at 3:30 pm currently.
Last year, the NSE had proposed to add another evening session from 6 pm and 9 pm to trade in index futures and options (F&O).
While longer trading hours mean more revenue for exchanges due to increase in volumes, derivative traders had expressed apprehension that their work-life balance may go for a toss. While some brokers had openly approved of the extension of trading hours, others were worried about their low bandwith.
While traditional broking firms, where the manpower spending is higher due to dependency on relationship managers, are not in favour of longer trading hours, discount brokers with superior technological capabilities are open to the implementation.
Earlier in February, the board of Association of National Exchanges Members of India (ANMI) had given in-principle approval to extend trading hours for index futures, subject to the ironing out of some operational difficulties like margins and trade files. The BSE Brokers Forum, on the other hand, had failed to build a consensus for trade time extension.
Sebi had sought feedback from exchanges and trading members to demonstrate system preparedness for the extension.
The exchange's rationale was that the extension will give traders a chance to react to global events. "It is important to be open when the US market opens and that is why (we want second session from) 6 pm to 9 pm. A mere extension up to 5 pm or 5:30 pm might not have solved that need," NSE's Sriram Krishnan had said earlier.
Major markets like the New York Stock Exchange and the London Stock Exchange offer slightly longer trading times, while others, such as the Buenos Aires Stock Exchange, extend even further.
"This contrast becomes more pronounced when we consider the 24/7 operations of the Forex and cryptocurrency markets, reflecting the evolving nature of global finance," Tejas Khoday, co-founder and CEO of FYERS, had said while supporting the move to extend trading hours.
[The Economic Times]
