The Securities and Exchange Board of India’s (SEBI) proposal to extend trading hours has led to worries among brokers over increased utilisation of operational staff and additional overheads that would be incurred, but others welcome it as a practice in line with the best worldwide.
Brokers are concerned over longer shifts that would work until midnight, and increased overheads.
Market participants may also be required to put up higher margins, because the timings of banks/custodians will not coincide with the market timings.
“The decision to implement longer trading hours is required to be considered, bearing in mind all these aspects of infrastructure,” said Dinesh Thakkar, chairman and managing director, Angel Broking, a leading brokerage.
Thakkar favours an ‘After Hour’ type of trading that exists in the US, where trading continues for 2.15 hours after the market closes.
However, favouring the SEBI proposal, Anup Bagchi, executive director of ICICI Securities Ltd said, “The way to develop markets is to find out client needs for various segments, create value and deliver it. In a world where events are happening 24X7 and which impact portfolios, a larger trading window will help mitigate risk better for portfolio managers, and give more opportunity to trade for traders.”
Bagchi said that there was a real possibility of market moving offshore if these needs are not met.
A spokesperson for the National Stock Exchange (NSE) said the longer hours came in response to requests from traders, but needed a broader consensus and regulatory approval to be implemented.