In possibly a good news to most brokers, Bombay Stock Exchange has ruled out an extension in the trading hours, for now, quashing the rumours that resurfaced last month with the news reports that BSE and NSE were contemplating extending trading till late in the evening, as against the current practice of ending the day at 3.30 pm. BSE MD and CEO Ashishkumar Chauhan reportedly said that BSE — one of the two premier stock exchanges in the country — will continue to operate as usual, i.e., from 9:15 am to 3:30 pm.
In August 2017, ET Now reported citing unidentified sources that both BSE and NSE (National Stock Exchange) were exploring the option of extending trading hours to as late as 5.30 pm, or even till 7.30 pm in the evening. Earlier July, the Rakesh Jhunjhunwala and Radhakishan Damani-backed smaller exchange Metropolitan Stock Exchange of India had floated a circular announcing extending trading hours to 5 pm but later withdrew it after both the bigger rivals BSE and NSE largely ignored the move.
ET Now had reported then that the capital market regulator SEBI (Securities and Exchange Board of India) was “in-principle” on board with the plan to extend the trading hours, but the broker community was yet to be brought on board by the stock exchanges. The brokers were reportedly apprehensive of the potential move, which, they believe, may result in a hike in the overhead costs.
Extension in trading hours has traditionally in the past met with opposition from brokers. In July, when Metropolitan Stock Exchange, the erstwhile Jignesh Shah-promoted MCX-Stock Exchange, said it will increase trading hours till 5.00 pm, Samir Arora, founder and fund manager of Helios Capital Management, had called the move “stupid” in a tweet. “Desperate move by a desperate exchange,” Samir Arora had posted in the tweet, adding that he hoped that NSE and BSE ignore it.
MSEI had done so ostensibly in order to gain volume and market share. Notably, MSEI is a very small player with only a little over 200 companies listed on it, in a market dominated by NSE in cash and derivatives and by BSE in terms of breadth and experience. NSE commands over 80% of the equity cash and equity derivatives market, with BSE controlling 14%.
A few years ago, both, BSE and NSE had extended trading hours in the morning to begin at 9.15 am with the pre-opening session opening at 9.00 am, from 9.55 am earlier, after SEBI allowed them to extend working hours from 9 am to 5 pm. Even that morning extension of trading hours at that time had met with a lot of opposition from brokers, who were more comfortable with the existing schedule.