Friday, October 23, 2009

 

Sebi allowed extension of trading hours. Market trading hours extended to 9am-5pm to align with international standards

You may soon be able to trade in the Indian stock markets between 9 am and 5 pm, with the Securities and Exchange Board of India (SEBI) giving the go-ahead for stock exchanges to extend trading hours. SEBI released an official circular on its website saying it was okay with trading hours being extended.

The Securities and Exchange Board of India has allowed stock exchanges to extend the trade timing from the present 10 am to 3.30 pm to 9am to 5 pm. It is now up to the exchanges to put in to place the necessary infrastructure before going for the extended trading hours.

it is an attempt to align the timings of Indian bourses with international standards.The rationale: the market regulator believes it is important to align Indian markets as far as possible with international markets, as it would attract international trading.

“With increased integration of the global markets, information originating from different countries has a bearing on Indian securities market. While the Asian markets are ahead of Indian time zone, the European and American markets extend much beyond the Indian market timings,” it said.

“Some exchanges in these countries have adopted longer trading hours, sometimes even extending up to 23 hours. This has facilitated market participants to hedge their risk that might arise due to global information flow,” Sebi said in a discussion paper.

Extending trade timings of the domestic exchanges may, therefore, enable domestic market participants to take advantage of such global information flows, Sebi said.

The stock exchanges will take a final decision in this regard even though both the Bombay Stock Exchange (BSE) and National Stock Exchange (NSE) had been calling upon the regulator to allow trading hours to be extended and sources say the NSE may soon implement the extended trading hours.

The exchanges’ view have been thought to be asking for an extension to counter the emerging SGX exchange, which opens at 8am, and which could be impacting volumes on BSE and NSE.

In consultation with the Stock Exchanges and other market participants, it has been decided to permit the Stock Exchanges to set their trading hours (in the cash and derivatives segments) subject to the condition that

a. The trading hours are between 9 AM and 5 PM, and

b. The Exchange has in place risk management system and infrastructure commensurate to the trading hours.


This Circular is issued in exercise of the powers conferred under Section 11 (1) of the Securities and Exchange Board of India Act 1992, read with Section 10 of the Securities Contracts (Regulation) Act, 1956 to protect the interests of investors in securities and to promote the development of, and to regulate the securities market.
This Circular is available on SEBI website at www.sebi.gov.in., under the category “Derivatives- Circulars”.

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