SEBI has allowed stock exchanges to extend the trade timing

The Securities and Exchange Board of India (SEBI) has proposed an extension of trading hours of stock exchanges to align the domestic bourses with international markets.

''With the increased integration of the global markets, information originating from different countries has a bearing on Indian securities market,'' SEBI said in a statement.

Trading on Asia Pacific bourses commences a little ahead of the Indian markets while the European and American markets open much later.

Extending the trade timings may enable the domestic market participants to take advantage of global information flows.

'Some of the exchanges in these countries have adopted longer trading hours, sometimes even extending up to 23 hours. This has facilitated market participants in these countries to hedge their risk that might arise due to global information flow,'' SEBI said.

''In a world where different exchanges are competing with each other to increase participation, it is imperative that the Indian markets align themselves to global markets to attract such trading interest. Extension of market hours would enable market participants to execute trading strategies in Indian markets based on  information flowing in, which otherwise would have been executed outside India.''

''Extending the trade timings of the domestic exchanges may, therefore, enable the domestic market participants to take advantage of such global information flows. Additionally, Indian markets have been in the pursuit of matching the best international standards and practices, and the extension of market hours would, perhaps, be a further step in this direction,'' SEBI said.

While the benefits of increasing market hours of trading in exchanges are evident, at the same time, issues with market wide implications such as those pertaining to risk management, collateral management, infrastructural constraints etc as well as the perception of the market participants and stakeholders would also play an important role in determining optimum market timing.

At present, the exchange-traded equity derivatives market is open from 9:55 am to 3:30 pm and the market timings are co-terminus with those of the underlying cash market.

While exchange-traded currency derivatives market operates from 9:00 am to 5:00 pm, exchange-traded commodity futures market operates from 8:00 am till 11:30 pm.