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Markets can now be open 9 to 5, says regulator. You could soon be able to trade for an additional two-and-a-half hours on stock exchanges with the Securities and Exchange Board of India (SEBI) on Friday allowing trading between 9 a m and 5 p m to align timings to international standards.

At present, trading hours are between 9.55 a m and 3.30 p m. SEBI, however, raised the caveat that the exchanges would have to ensure that risk management systems and infrastructure commensurate to longer trading hours were in place before investors transact for eight hours a day.

The National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE) welcomed the SEBI move and added that they would soon extend trade timings. They, however, did not clarify whether timings would be extended to 5 p m, though executives indicated that trading would start at 9 a m. Last year, NSE had first proposed a change in trading hours at a time when foreign institutional investors and hedge funds preferred to trade on the Singapore Stock Exchange (SGX), where NSE Nifty futures were also listed. With longer trading hours because SGX opened for trading at around 6.30 a m India time, the open interest positions on Nifty futures traded on SGX had reached close to the levels seen on NSE.

“Extending trading hours will improve liquidity and volumes in the market,” said Motilal Oswal, chairman and managing director, Motilal Oswal Securities, adding that the move could also help shift a part of the trading back to the Indian exchanges. Asked about longer trading hours, a BSE spokesperson said, “We welcome the SEBI directive and we are well-prepared.”

Currency derivatives trading starts at 9 a m and ends at 5 p m, so extending trading hours to equity and equity derivative segment should not be difficult. Market participants, however, said widespread changes would be required for exchanges to allow trading for eight hours a day. Banks that are involved in settlement, brokerages and exchanges could see an increase in manpower costs, executives said.


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June 2024