Commodity traders urge Sebi to restore trading hours till 11.30 pm

Commodity traders have asked India’s markets regulator to restore trading hours till 11.30 pm to contain trading volatility and losses seen after the coronavirus pandemic since December 2019.

Narinder Wadhwa, president of Commodity Participants Association of India (CPAI), said in a letter to Santosh Kumar Mohanty, executive director and whole-time director of Securities and Exchange Board of India (Sebi), said the request is based on an opinion poll of its members who voted for restoration of the original trading timing.

After the government imposed a nationwide lockdown to prevent the spread of the coronavirus, Sebi reduced the trading hours on commodity markets to 9 am-5 pm from the earlier 9 am-11:30 pm to help exchange employees and traders practise social distancing.

However, the shortened trading hours, the association claimed, have increased their risks and thus, the possibility of losses.

Citing the outcome of the members' survey, Wadhwa said as much as 69 per cent of them want the trading hours to be restored till 11:30 pm.

"Moreover, many members are of the opinion that the reduced trading hours are depriving their clients and other market participants from accessing the market when trading and volatility peaks on global commodity exchanges, posing greater risks of adverse gap-up or gap-down opening in the domestic market that open at 9 am the following day," the letter, seen by PTI, said.

"In view of this, we request Sebi to consider restoring the trading hours to 11:30 pm as soon as it deems possible," it said.

The association lauded Sebi for taking measures to reduce compliance burden, easing operational procedures, extending deadlines, and for its regular advisories to the states which gradually facilitated issuance of curfew passes for staff of broking entities to reach office.

"These measures have bolstered the confidence and morale of the broking fraternity in running the business and providing the services to the clients," it said.

Following the shortening of trading hours, the largest commodity exchange MCX had last week told PTI that the volume on its platform had more than halved.