(Eds: Updating with industry comments)
New Delhi, May 4 (PTI) Markets regulator Sebi today allowed exchanges to extend the trading time in equity derivatives contracts by more than eight hours till almost midnight from October 1.
"It has been decided to permit stock exchanges to set their trading hours in the equity derivatives segment between 9:00 am and 11:55 pm," Sebi said in a circular.
Currently, trading is allowed from 9.15 am till 3.30 pm.
The extended timing is similar to the trading hours for commodity derivatives segment which are presently fixed between 10 am and 11:55 pm.
The move is part of Sebis efforts to enable integration of stocks and commodities trading on a single exchange.
The extended timing has been a long pending demand of the exchanges and has been welcomed by bourses saying the move will bring Indian market in line with international market and increase the depth of the Indian capital markets.
According to Sebi, the permission is subject to stock exchanges and clearing corporations have in place risk management system and infrastructure commensurate to the trading hours.
In case, stock exchanges plan to extend the trade timings beyond the extant trading hours, they would require prior approval from Sebi, according to the circular.
The bourses would also be required to submit a detailed proposal, including the framework for risk management, settlement process, monitoring of positions, availability of manpower, system capability and surveillance systems.
This will come into effect from October 1, the Securities and Exchange Board of India (Sebi) said.
In a statement, BSE MD and CEO Ashishkumar Chauhan said: "Globally, the derivative exchanges are already following the extended trading hours. The introduction of the extended hours is a positive development and will bring Indian market in line with international market and Indian commodity derivative markets".
Echoing the view, Sanjit Prasad, MD and CEO at Indian Commodity Exchange (ICEX) said Sebis decision will help increase the depth of Indian capital markets with all segments now offering an equal and better opportunity. It will also mitigate the risk of developments across international markets impacting the Indian market due to a time difference.
However, Rajesh Baheti, president of ANMI (Association of National Exchanges Members of India) cautioned that extended trading hours should be restricted to index derivatives alone and not cover individual stocks, as they may be vulnerable to abuse by unscrupulous elements.
The decision comes after the Sebi board in December announced much-awaited integration of stocks and commodities trading on a single exchange from October this year.
Currently, commodity derivatives are traded on separate exchanges, which include MCX and NCDEX.
Sebi has already been regulating the commodities derivatives market after the merger of erstwhile Forward Markets Commission (FMC) with it following the Rs 5,600 crore payments crisis at the National Spot Exchange Ltd (NSEL).
In his budget for 2017-18, Finance Minister Arun Jaitley had proposed that the commodities and securities derivative markets would be integrated further by integrating the participants, brokers and operational frameworks. PTI SP SP MR MR