MUMBAI: Trading hours on Indian stock exchanges may stretch upto to 5 PM, from the current 3.30 pm, if the Securities and Exchange Board of India ( Sebi ) accepts a proposal of MSEI — erstwhile MCX Stock Exchange (MCX-SX) — seeking permission to extend timings for its equity platform.
In 2009, the capital market regulator had allowed its bigger rivals NSE and BSE to extend trading hours till 5:00 PM, but the exchanges refrained from implementing it due to opposition from the brokers.
If MSEI decides to give investors more time to trade, NSE and BSE will be forced to follow suit. MSEI’s plan to stretch trading hours is part of its strategy to revive the exchange.
“This extension will lead to overall development of the equity segment and also help to revive the interest of market participants in the equity segment of MSEI,” said Abhijit Chakraborty, CFO, corporate strategy at the Metropolitan Stock Exchange of India.
“Sebi sought more details from MSEI about its plans and the purported benefits of extended trading hours with examples of international practices for the same, which MSEI has already shared with Sebi”. In an earlier circular in October 2009, Sebi had allowed exchanges to conduct trading from 9 am till 5pm in cash and derivatives segment.
On December 16, 2009, the BSE made the first move, saying that it would open for trading at 9.45 am, and very next day the National Stock Exchange said it would commence trading 55 minutes early and finally both stock exchanges decided to open to stock exchange at 9 am. However, both of them then decided not to extend the timing beyond 3.30 pm due to resistance from the brokers because of the cost implications.
Big brokers are unlikely to oppose the plan to extend the trading hours this time. Nirmal Jain, chairman of IIFL Holding, said: “Most of the large brokers are now already a part of currency derivatives segment which operates till 5 pm or are associates of commodity market which operates till 11.30 pm. There won’t be any cost implications as the necessary systems and processes are in place.”
While BSE spokesperson said that they are not aware of any such move; an NSE spokesperson said that “generally, as an exchange we will abide by the regulator’s final guidelines on such issues”.
Global exchanges also have different trading hours. Foreign exchanges like Euronext, Deutsche Borse, Six Swiss and BME Spanish offer extended trading hours till 5pm or 5.30 pm.
“Since the members who are exclusive in EDS or ECM are spread across the country, the move to extend trading hours will further facilitate members to reach out to investors in semiurban and rural areas, enhance liquidity and broaden the shareholder base,” said an MSEI spokesperson.