Trading in equity derivatives till 11:55 pm from October

By: | Published: May 5, 2018 1:39 AM

Sebi on Friday said it has allowed stock exchanges to extend trading in equity derivatives till 11:55 pm in order to align their trade timings with that of commodity derivatives in the country.

stocks, stock markets, base, nseEarlier, the markets regulator had allowed unified exchanges for stocks, commodities, and derivatives.

Securities and Exchange Board of India (Sebi) on Friday said it has allowed stock exchanges to extend trading in equity derivatives till 11:55 pm in order to align their trade timings with that of commodity derivatives in the country.

According to a Sebi circular, from October 1, 2018, stock exchanges have been permitted to set their trading hours in equity derivatives segment between 9 am and 11:55 pm. At present, trading is allowed from 9.15 am to 3:30 pm.

Earlier, the markets regulator had allowed unified exchanges for stocks, commodities, and derivatives.

Responding to the initiative, Ashishkumar Chauhan, MD & CEO of BSE, said: “We welcome Sebi’s move to permit Indian stock exchanges to set their trading hours in the equity derivative segment between 9 am and 11.55 pm. Globally, the derivative exchanges are already following the extended trading hours. The introduction of the extended hours is a positive development and will bring Indian market in line with international markets and Indian commodity derivatives markets”.

An official at another exchange, on the condition of anonymity, said, “Basically it allows market participants to manage their hedges far more efficiently. In a globalised environment, there are a set of news flows that affect the overall market. This gives an additional tool for people to take a view or hedge a position in case things happen after the market closes. The extension of market hours has been in discussion for some time. In most international markets derivatives trade for longer hours”.

However, stock brokers were skeptical about Sebi’s move. “For brokers, there will be an increase in cost with extended hours without any commensurate increase in income,” said a broker requesting anonymity.

Kamlesh Shroff, spokesperson of BSE Brokers forum said, “This is an enabling circular which puts stock exchanges at par with commodity exchanges. This was expected. We are confident that Sebi and exchanges will move ahead with the implementation only if they find that the costs commensurate with the benefits are achieved”.

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