SEBI to limit commodity futures trading till 5pm: Sources

PALAK SHAH Mumbai | Updated on March 25, 2020

While equity markets close by 3.30 pm, commodity markets in India trade between 10 am to 11.50 pm

The Securities and Exchange Board of India (SEBI) is likely to cut down trading hours for commodity markets in India till the time Covid-19-19 linked lock down is in place, sources close to the decision making body of regulator told BusinessLine.

The time for commodity market trading will be cut short till 5 pm instead of current practice of allowing it up to mid night. A circular in this regard will be issued by late evening today or early tomorrow, the sources said.

While equity markets close by 3.30 pm, commodity markets in India trade between 10 am to 11.50 pm. Brokers can shut down their office servers only past mid-night after commodity markets close. Such a situation led to tremendous pressure on brokers and commodity exchanges for operating in the current situation as employees too are unwilling to wait till mid-night, the sources said.

Narendra Wadhwa, President, Commodity Participants Association of India (CPAI) told BusinessLine that they have requested SEBI to cut short the timing as we are not able to keep offices open up to mid-night.

“We have suggested SEBI that allowing commodity markets to trade till 5 pm should be fine. As it is, equity markets close by 3.30 pm and all data files come by around 5 pm, so broker offices will function till that time. But operating up to mid-night in these times was extremely painful and practically impossible given the lock down and fear of spread of disease if more staff is deployed,” said Wadhwa.

Unlike the equity markets, where both cash and futures segment are operating, only futuers are trading in commodity segment leading to distorted price discovery. Mandis selling agricultural goods and phycial bullion shops are all shut across the country, which shows that futures trading was not the measure of real demand and suppy but speculation, brokers said.

The brokers are working with the staff in shifts and has arranged for various facilities to help them read office. While trading terminals have been shifted to the dealers house, someone needs to start the main servers in the brokers office and even shut them off. There is pressure from family members of brokerage staff to not go to office due to fear of Coronavirus, they said.

Published on March 25, 2020

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