Traders, farmers oppose Sebi move to extend agri-trading hours
04 December 2018
Commodity market stakeholders have opposed a move by Securities and Exchange Board of India (Sebi) to extend trading hours for agricultural commodities to suit hedging on international markets, saying the decision would lead to excessive speculation on bourses and will act against the interests of domestic participants.
Sebi in its circular dated 30 November, had inter-alia specified commodity category-wise time limits within which exchanges are permitted to fix trading hours for trading in derivatives contracts.
Sebi said the measure is intended to deepen the commodity derivatives markets as well as to enhance the participation of stakeholders such as farmers producers organizations (FPOs), value chain participants, foreign entities having actual exposure to Indian physical markets etc as recommended by the Commodity Derivatives Advisory Committee.
Sebi had announced an extension of trade time for agriculture and agri-processed commodities from current 10 am to 5.30 pm, to 9 am to 9 pm effective from 31 December.
For non-agricultural commodities the revised time is 9:00 am to 11:30 pm (after start of US day light savings in Spring season) and 11:55 pm (after end of US day light savings in Fall season).
While expressing fears of speculative practices, traders, armers and analysts have raised objections to the move terming it as a move to favour international hedgers.
Sebi said stock exchanges can extend the trade time for their commodity derivatives segment accordingly.
The regulator, however, said the extension of the trade timing is subject to the stock exchange and its clearing corporation(s) putting in place adequate risk management system, surveillance system and infrastructure commensurate with the increased trading hours.