Blame it on the human nature to be averse to changes or real operational issues, marketmen don’t seem to be quite pleased with the approval by the Securities and Exchange Board of India (Sebi) for extension of trading hours in the stock markets. The regulator had last month allowed stock exchanges to set their trading hours between 9 am and 5 pm. The stock markets currently trade between 9:55 am and 3:30 pm.

Broking houses along with other market participants have made representations to the Sebi on the extension of trading hours. “There are some real operational issues. While the equity markets are quite robust and can handle the extra trading hours, the banking system is not geared up to handle the pressure. There will be issues in the settlement cycle and cost of market participants will increase,” said Prabhudas Lilladher VP and head of research Apurva Shah. Brokers also say that there would be a huge stress factor due to the increase in trading timings. “Increasing trading time by 1 hour is okay but stretching it by 2-3 hours is a bit too much,” said Shah.

The CEO of a leading mutual fund house said that there could be issues in computation of net asset value (NAV) of schemes and some back-office issues if the trading hours are extended. “We are studying the matter and are in the process of making necessary changes in our systems,” said Association of Mutual Funds in India chairman A P Kurian.

... contd.