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Sebi advisory committee to discuss trading hours extension

Monday, September 11, 2017

An advisory committee of market regulator Sebi is likely to discuss a proposal for extending stock market trading hours, even as several brokers feel any such move would increase cost and logistics burden for them.

The stock market in India currently opens at 9 am and closes at 3.30 pm, but there is a view -- including among stock exchanges -- that the trade hours could be extended till up to 7.30 pm to better align domestic trading with global markets. The proponents of this proposal feel extended hours can help boost trade volumes, thus generating greater revenue for exchanges, and help deepen the equity markets in the country.

The proposal is likely to be discussed by Sebi's Secondary Market Advisory Committee, which is scheduled to meet tomorrow. Various proposals on the table include extending trade hours till 5 pm, 5.30 pm and 7.30 pm.

Any change to the trade timings is likely to be made only after a detailed consultation process with all concerned stakeholders, a senior regulatory official said, while observing that the consultation by Sebi's secondary advisory committee would only be the first stage.

The 19-member committee is led by Jayanth R Varma, Professor, IIM Ahmedabad. The members of the committee include representatives of stock exchanges, depositories, brokerage firms, as also independent experts and officials from Sebi and the government.

The panel is mandated to review all developments in secondary market and recommends measures for changes and improvements in market structure. It also recommends measures for improving market safety, efficiency, transparency and integrity, as also measures for reducing transaction costs.

At present, the markets also have 15 minutes each of pre-open and post-closing sessions within the overall schedule of 9 am to 3.30 pm. Last time, the trade timings were changed in 2009 when opening time was changed from 9.45 am to 9 am.

Exchanges have earlier also proposed to extend the timings, but all such proposals have always met with a strong resistance from brokers while regulator Sebi has so far maintained a neutral stance and wants any move to be based on views of all stakeholders, including bourses and market intermediaries.

"The Secondary Market Advisory Committee of Sebi will meet on Monday to mull, amongst other things, whether to increase market hours. Besides, the Sebi board is scheduled to meet on September 18, for which proposals on table include introduction of weekly stock futures.

"Both the steps will only add to more speculation. If Sebi really wants to reduce speculation and help investor fraternity to seriously explore the benefits of derivatives, it should start settling the derivatives by actual delivery of shares," said VK Sharma, Head PCG and Capital Market Strategy, HDFC Securities.

Exchanges feel that technology advancements have made it easier today to successfully follow a longer trading period and the reservations are misplaced against the move that would help better align Indian markets with global ones.

While most major Asian markets open before Indian exchanges, trading in India fails to capture the prevailing trend from most part of the European markets while the trends in the American markets get reflected next morning only, said officials at the exchanges.

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