07-Feb-2024
2 mins read
In a significant development, the Association of National Exchange Members of India (ANMI) has granted the approval for extending the trading hours of index futures, as reported by CNBC-Awaaz from a source.
ANMI’s Decision
The ANMI Board has decided to extend the trading hours for index futures. This decision is seen as a pivotal step towards aligning India’s market operations with global standards, potentially enhancing liquidity and providing traders with more flexibility.
Broader Industry Support
The proposal, now backed by ANMI, will be further championed by the Brokers Industry Standards Forum (ISF). The ISF, which includes key brokers’ associations like the Commodity Participants Association of India (CPAI) and the BSE Brokers Forum (BBF), is expected to formally approach the Securities and Exchange Board of India (Sebi) with a request to implement the extended hours.
Background and Challenges
The National Stock Exchange (NSE) had previously proposed to Sebi the extension of trading hours for index futures to 9 pm from the current closing time of 6 pm. However, the proposal had been met with scepticism from smaller, traditional brokerage firms concerned about the additional resources needed to manage an evening trading desk. Concerns were also raised about the logistical challenges of settling trades and preparing client files between the regular session’s close at 3:30 pm and the proposed evening session.
Regulatory Perspective
During a Brokers ISF event on January 29, Sebi chairperson Madhabi Puri Buch highlighted the divided opinions within the broking community regarding extended trading hours. While acknowledging the need for a broad consensus, Buch indicated that a decision would be made after a thorough analysis of feedback from both the broking and investor communities. The timeline for implementing the extended trading hours remains uncertain, as Sebi emphasises the importance of considering the ecosystem’s overall feedback.
The approval by ANMI to extend trading hours for index futures marks a crucial step towards modernising India’s trading practices. However, the proposal’s final approval and implementation depend on a collaborative approach, addressing the concerns of all market stakeholders and securing the endorsement of the market regulator, Sebi.