The BSE is batting for longer stock market trading hours. At a recent public event, Ashish Chauhan, MD and CEO, BSE highlighted, what he called, a discrimination between commodity and equity market trading in India.
Commodity markets trade for 15 hours daily but equities are allowed to trade for only six-and-a-half hours by markets regulator SEBI.
“Commodity markets trade from 9 am to 11.55 pm. But when it comes to equities, we somehow want to stop at 3.30 pm. I have been told that foreigners are interested in keeping it that way and so do the television news channels as they will have to work longer. But effectively, the rest of the world (markets) trades for almost 16 hours a day,” Chauhan said at a recent virtual conference on capital market reforms.
For over a decade now, India has lost out in terms of trading volumes to Singapore, Dubai and US exchanges mainly due to shorter trading hours. A few years ago, SEBI said exchanges were free to keep markets open up to 5 pm. But, sources said the regulator stalled the bourses from extending trading beyond 3.30 pm.
The Metropolitan Stock Exchange of India (MSEI) had attempted to extend trading hours to attract higher volumes but it was forced to modify and abort its plan due to opposition from big exchanges. Experts say that longer trading hours should be uniformly done for both cash equity and derivatives to avoid manipulation and concentration of volumes in futures and options.
“We have another equity exchange in India at Gujarat International Finance Tec-city that trades for 22-and-a-half hours every day. Technology is available and wherever required we can extend trading hours for cash equities and derivatives. T+1 trade settlement is possible but I was told foreigners don’t like it... so even that may not happen in a hurry. But our systems are ready for it,” Chauhan said.
SEBI chief Ajay Tyagi had expressed his eagerness to bring T+1 settlement in equity markets to ease margin collection hassles. However, the regulator went slow on the reform after opposition from foreign investors.