Sebi allows trading in equity derivatives till 11.55 pm

The Securities and Exchange Board of India (Sebi) has allowed stock exchanges to extend trading in equity derivatives by more than eight hours in order to align trading with international markets.

The market regulator on Friday allowed stock exchanges to trade in equity derivatives up to 11.55 pm against the current closing hours of 3.30 pm. Currently, trading is allowed for a little over six hours from 9.15 am to 3.30 pm.
Starting October, exchanges will be permitted to trade in equity derivatives for nearly 15 hours, ie, between 9 am and 11.55 pm.
The decision is aimed at integration of various trading segments of securities market as stock exchanges have been permitted to trade commodity derivatives along with other segments of securities from 1 October. “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 markets in line with international market and Indian commodity derivative markets,” said Ashishkumar Chauhan, MD & CEO, BSE.
Bourses seeking to extend their trading hours have to obtain approvals from Sebi after submitting detailed proposals, including the framework for risk management, settlement process, monitoring of positions, availability of manpower, system capability and surveillance systems.
The move not only aligns Indian markets with their foreign counterparts, but also helps avoid trading volume loss as investors are deprived of opportunities when other markets are open.
While the extended hours will give investors an opportunity to trade or hedge portfolios systematically, it’s unclear whether the move will spur volumes and volatility.