May 4, 2018 / 11:40 AM / a year ago

SEBI to allow longer hours for equity derivatives trading

The logo of the Securities and Exchange Board of India (SEBI) is pictured on the premises of its headquarters in Mumbai, March 1, 2017. REUTERS/Shailesh Andrade/Files

MUMBAI (Reuters) - The Securities and Exchange Board of India said on Friday it will extend the window for trading equity derivatives starting October, a move that will enable stock exchanges to offer the products for nearly 14 hours a day.

The SEBI said it had decided to allow stock exchanges to set their trading hours for equity derivatives from 9:00 AM (0330 GMT) to 11:55 PM local time, starting Oct. 1.

Currently, SEBI allows trading in equity derivatives from 9:00 AM to 5:00 PM. However, exchanges only offer trading until 3:30 PM.

Stock exchanges, which have been keen to extend the trading hours for equity derivatives to allow Indian traders to hedge any event risk that arises late at night, welcomed the move.

“This is a positive thing. It actually brings our markets in line with international market,” Vikram Limaye, chief executive of India’s biggest bourse, National Stock Exchange (NSE), told Reuters.

NSE and its smaller rival BSE said they would look to extend trading hours and work out plans before October.

“Globally, the derivative exchanges are already following the extended trading hours,” said Ashishkumar Chauhan, chief executive of BSE, Asia’s oldest exchange.

Stock exchanges wanting to extend trading hours will have to seek approval from SEBI with a proposal detailing their framework for issues such as risk management, settlement process and availability of manpower, the regulator said.

Reporting by Abhirup Roy, Savio Shetty and Devidutta Tripathy; editing by Larry King

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