The proposal was discussed in the advisory committee of the trading members of the NSE. (Representative image)
Transactions during the evening session will take effect in the next business day’s trading session.
The National Stock Exchange (NSE) is looking to increase trading hours in the equity derivatives segment in a phased manner, a move that may limit overnight risk arising from global information flow, a senior official said on Monday. The exchange is planning a session from 6 pm to 9 pm after a break from the close of the regular session from 9.15 am to 3.30 pm, NSE Chief Business Development Officer Sriram Krishnan told PTI.
In addition, trades during the evening session will be forcefully included in the trading session on the next business day, he said. Based on the response, a gradual extension of market timing to 11.55pm – in line with commodity derivatives – would be considered, he added. To start with, only index derivatives would be available in phase 1, followed by individual stock options and others.
Moreover, the NSE has submitted its proposal to market regulator Securities and Exchange Board of India (Sebi) for approval.
“We are hopeful that we will get approval from Sebi for our proposal soon,” Krishnan said. Once the exchange gets approval, all stakeholders will have to make preparations such as redesigning processes, streamlining different timelines, etc., before expanding trading hours in the Futures & Options (F&O) segment.
He said the primary objective of the proposal came from the trading community.
The exchange held consultations for more than nine months with various trading members serving different categories of investors in the regions, industry associations and other stakeholders.
The proposal was also discussed in the advisory committee of the trading members of the NSE.
Market experts said longer trading hours would help increase capital formation by allowing more people from India to participate and attract foreign investors to invest and hedge their portfolios with equity F&O.
The NSE’s proposed move to extend trading time for equity derivatives segment will help market participants and retail investors. In India, the stock and equity derivatives market closes at 3:30 PM, while most European stock markets would have just opened for trading, while the US stock markets would be closed. Indian investors, especially small ones, do not have access to markets in global jurisdictions. Such investors cannot trade if any information or events that affect Indian asset prices, especially stock indices, occur outside regular trading hours. The longer trading hours in the offshore markets provide the opportunity to include such information when the onshore markets are closed.
This would help in onshore price research of Indian assets, and investors will get an opportunity to weigh in with foreign investors whenever there is news impacting a sector/industry or the economy as a whole.
In 2018, the market regulator allowed exchanges to set their trading hours in the equity derivatives segment between 9 a.m. and 11:50 p.m.
This was similar to the trading hours for the commodity derivatives segment, which are currently fixed between 10am and 11:55pm.
The move was part of Sebi’s efforts to enable integration of equity and commodity trading on a single exchange.
(This story has not been edited by News18 staff and is published from a syndicated news agency feed – PTI)
