Small brokers up in arms against longer trading hours
23 December 2009
The decision by the Bombay Stock Exchange and the National Stock Exchange to start trading at 9:00 am instead of the present 9:55 am continues to raise opposition from brokers. On Tuesday, the BSE Brokers' Forum, with 700 members, again expressed its reservation against the extension, which is to be implemented from 4 January.
Last week, the country's two premier bourses had to postpone their decision to open markets at 9 am after an outcry from brokers, particularly the smaller ones. They fear that the 55-minute extension would increase their costs without a corresponding increase in business or income.
However, the Association of NSE Members of India (ANMI), which was most vocal in expressing its reservations against the move, has gone silent on the issue after it held its board meeting on 20 December. Reportedly, ANMI has desisted because its statements were causing embarrassment to the NSE.
The managing committee of the BSE Brokers' Forum met on 21 December to discuss the issue. ''The committee unanimously reiterated its stated position, as also submitted to the regulator in April 2009, of strong reservations in advancing market opening time to 9 am.
The move has no clear benefit to market participants and this has been reaffirmed by 79 per cent of trading members of BSE in a survey conducted earlier this year. It is noteworthy that no section of the market has demanded any such move and there is no consensus on the matter,'' the forum said in a statement on Tuesday.
Exchanges expect that by extending trading hours, investors would get more time to react to global markets, whose participation on Indian bourses would also increase. NSE hopes that part of the derivatives business in Nifty, which is done on the Singapore Exchange (SGX), could move back to Indian market.