NSE brokers to approach Sebi, govt on extended trading hours

After the Bombay Stock Exchange (BSE) Brokers Forum, the Association of National Stock Exchange Members of India (ANMI) has decided to approach the government and the Securities and Exchange Board of India (Sebi) on extension of trading hours from January 4.

Though the ANMI, like the BSE Brokers Forum, is not completely opposed to the move, it says a weak banking infrastructure may create chaos when the markets open at 9 am, 55 minutes before their current opening time.

Intense rivalry has prompted both the National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE) to advance their market opening time to 9 am from January 4. The NSE will be the biggest beneficiary of the move as 98 per cent derivatives trades are done on its platform.

According to sources, while not many members of the ANMI are opposing the move, they want an upgrade of the banking system.

“One of the major problem is the weak clearing system of domestic banks. The ANMI has decided to urge the Reserve Bank of India to fast-track its clearing system before January 4,” said a Mumbai-based stock broker.

For brokers, arranging margin funds from clients could be a problem after the new timings come into force as banks do not open around 8 am. Also, brokers say that the real time gross settlement system, where cheques are cleared in a few hours, has operational issues. Also, RBI recently told banks to classify only cheques of Rs 10 lakh and above for high-value clearing. Other cheques could take two days to be cleared.