New Exchange Timings!!!
People in Exchange have not welcomed the move of SEBI to extend trading hours by 55 mins from new year.People like brokers,sub-brokers,mutual fund,foreign investors have all voiced together that Extended trading hours will put pressure on back-office operations.
The main objective of extending the trading hours on Prima facie was to capture on volumes which Indian bourses lose due to early start of SGX(Singapore Exchange Ltd).But there was ban on participatory notes to trade in Nifty futures a year back so volumes plumetted.But now this ban is uplifted.Also volume on SGX is around 6% in value terms compared with NSE's volume(daily).Also SGX starts at 6:30 am indian time so starting Indian bourses at 9:00 am won't serve the purpose!!
Also one more objective of Extending trading hours was to be in "Sync" with Global markets.Given the present timings this is possible for Asian and European Markets but even if trading hours are extended till 5:00 pm it won't be possible for to open with American Markets(open at 7:00 pm).
So objective is yet unestablished of being in resonance with all the breaking news!
But every problem has a solution and so there exists a problem(GYANN).
Solution:-We can take learnings from Chicago Mercantile Exchange(CME).CME is open for almost 23 hours for few products.The World's largest exchange,splits the day in two trading sessions.1'st Session-8:30 am till 3:15 am. 2'nd Session:-3:30 am till 8:15 am!!!!!!!!! HUUHHHH....
Now don't they(CME) face problem of Back office and Infrastructure???
Yes they "DID" but not now.As they follow a simple policy of -Settling the trades of 1'st session on that very day and trades of 2'nd session are settled on very next day!!! And slowly and simultaneously develop the Infrastructure!Tough one but start can be made.
Conclusion:-The step taken by our National Exchange on prima facie is good but then some policy should also be rolled out to address problems arising out of it.
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