The Securities and Exchange Board of India (Sebi) has clarified that the issue of extended trading hours for equity derivatives is under consideration but a final decision can be taken only after receiving feedback of a wider set of market participants, including brokers and investors.
This comes following an application from the National Stock Exchange (NSE) for longer trading hours for the derivatives or futures & options (F&O) segment.
According to Sebi Chairperson Madhabi Puri Buch, while market infrastructure intermediaries or MIIs—stock exchanges, depositories and clearing corporations—are an important part of the capital market ecosystem, extended trading hours for the F&O segment would involve brokers as well and hence their views must be taken into consideration.
“We have discussed the issue with the exchanges. There are three entities in the ecosystem—exchanges, clearing corporations and depositories. Then there is the large broking community and a still bigger community of investors. So, for a complete discussion on this issue, we need to get their views and responses,” said Buch.
“Just one part of the ecosystem has come to us and that is not sufficient, so we have communicated that the feedback of the broking and investor communities is needed. Only after we analyse their feedback, we can take a decision,” added the Sebi chairperson.
This assumes significance as NSE has been trying to get the regulatory nod for longer trading hours in the F&O segment as it believes that such a move would help traders and investors bet on global and domestic developments in a much more efficient and timely manner.
Incidentally, there are many exchanges across the world that have longer trading hours in the derivatives segment when compared to the Indian bourses.
In a recent interaction with Business Today, NSE MD & CEO Ashishkumar Chauhan had said that other exchanges that got automated much later than India already have longer trading hours even though we have the technology in place to facilitate trading for longer hours.
“Technology allows us to increase the trading hours and it is in the interest of the investors, not just for the traders. Yes, there is a cost component to it. We have sent the proposal to Sebi,” said Chauhan.
“We were the first automated exchange and even though we used to trade for only two hours officially, the trading activities used to happen throughout the day. Over the years, our trading hours have increased and while the rest of the world automated much after, they are now trading for over 20 hours daily,” he added.
