Sebi proposes fewer holidays at bourses

Market regulator Securities and Exchange Board of India (Sebi) is looking into a proposal by several investors to allow fewer trading holidays on stock exchanges in line with the global practice.

“Sebi is actively considering the proposal to reduce the trading holidays at bourses and is likely to take a decision on the matter soon,” an official close to the development said.

According to analysts, this move by Sebi will increase the trading volume in domestic bourses and would also attract foreign investors.

SMC Capitals Equity Head Jagannadham Thunuguntla said, “From the global standards, India has more number of trading holidays. The reducing of holidays would increase the participation of investors, including the foreign ones, and would increase the trading volume,” he said.

For 2009, the Bombay Stock Exchange has 19 listed trading holidays and these exclude the weekly Saturday and Sunday off. In developed countries the trading holiday at leading bourses are far less. For 2009, there are only nine trading holidays on the New York Stock Exchange. In European markets, there are just four holidays this year excluding Saturdays and Sundays. “Due to more holidays in domestic exchanges, investors loose out on several big events which occur in global markets during the holiday. To cash on this opportunity and give a level playing field, local bourses should also reduce the holidays,” a market participant said.

Recently, Sebi opened gates for longer trading hours for stock exchanges, allowing the bourses to extend market hours by around two-and-a-half hours between 9 am and 5 pm.

“ It has been decided to permit the stock exchanges to set their trading hours (in the cash and derivatives segments) subject to the condition that the trading hours are between 9 am and 5 pm,” Sebi had said.

The market regulator had further asked the bourses to reset their timings provided they have in place risk management system and infrastructure commensurate to the trading hours.