Sebi mulling over NSE proposal to extend derivative trading hours

The National Stock Exchange (NSE) has sent a proposal to the Securities and Exchange Board of India (SEBI) to have an evening session to trade in index futures and options to help investors to hedge risks, an NSE official told Reuters.

The Securities and Exchange Board of India (SEBI) is reviewing a proposal from the National Stock Exchange (NSE) to extend trading hours for index derivatives. While a decision on the same has not been taken by the market regulator yet, they are mulling over the possibilities, a Reuters report citing two sources with direct knowledge of the development has stated.

The NSE wants SEBI to consider holding an evening session to trade in index futures and options to help investors hedge risks, an official from the top bourse in the country told the news agency.

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One of the sources reportedly said that SEBI is assessing whether the extended hours will fuel already high derivative trading volumes and if the trade settlements will be smooth. The source was quoted as saying: “For smooth settlement of trades, both the NSE and BSE (Bombay Stock Exchange) and their respective clearing corporations need their systems to be prepared to handle extended trading hours.”

An official privy to BSE’s stance on extended trading hours said the exchange is ready to facilitate the extension if the regulator approves of NSE’s request.

Also read: Anxious moments prevail ahead of NSE’s evening trading launch

SEBI and BSE did not respond to Reuters’ email seeking comment. Moneycontrol did not independently confirm the news development either.

The NSE has proposed extended trading between 6 pm IST to 9 pm IST, with evening-session trades to be settled the next day, said Sriram Krishnan, NSE’s chief business development officer.

He said that cash equities and single stock options have been kept out of the pilot plan.