Indian capital market regulator SEBI (Securities and Exchange Board of India) on Friday revised the trading duration in the equity derivatives segment extending the same up until 11:55 pm. The said change in the timings will be effective from 1 October 2018 onwards. As of now, equity derivatives trading happens from 9 am to 4 pm.
The decision is aimed at the 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 Oct. 1.
The extension in timings will be permitted from October 1. However, stock exchanges will have to seek Sebi’s permission to extend trading hours.
SEBI had earlier allowed unified exchanges for stocks, commodities, and derivatives. That came after the Forwards Market Commission, the erstwhile regulator for commodity markets, was merged with it in the aftermath of the Rs 5,600 crore payments crisis at the National Spot Exchange Ltd.
In December, the Sebi board had announced the much-awaited integration of stocks and commodities trading on a single exchange from October this year.
Currently, commodity derivatives are traded on separate exchanges, which include MCX and NCDEX.
It’s not clear yet if the extension of trading hours will lead to a spurt in volumes, said Amit Khurana, head of equities and research at Dolat Capital Market Pvt. Ltd. What will be key to watch is how institutional investors digest this as they form a large part of the derivatives market, he told.