Sebi to extend trade in currency segment

Trading hours may be extended to 7:30 pm

The Securities and Exchange Board of India (Sebi) is set to extend trade in the currency derivatives segment by two and a half hours — against the current practice of trade being halted at 5 pm currently, it will be halted at 7:30 pm.

“Now, we have come out with an approval that the timings of the currency market be enhanced from 5 pm to 7:30 pm. So, we are moving in a direction in which the Indian currency derivative market can help companies, for instance, to hedge on a continuous basis. This is one small step in that direction,” Sebi Chairman UK Sinha said.

 

NEW INITIATIVES

• Sebi is set to extend trade in the currency derivatives segment by two and a half hours
• Soon, the regulator is also likely to come out with guidelines on crowd-funding, a process through which entrepreneurs raise money from a large number of smaller investors

Earlier, participants in the sector had sought the trade be extended till 11:30 pm to allow investors to take decisions based on the movements of other currencies, which are traded late in the day. Exporters, importers, etc, had made similar requests.

“There are a lot of investors with international exposure in commodities. An increase in timing would help them, along with exporters and importers, who need an avenue to hedge risks,” said Hemal Doshi, chief currency strategist, Geojit Comtrade.

An exchange official said in this platform, the curbs on position limits imposed in July were a bigger challenge than timings.



Sinha said he has received positive feedback from the government on tax breaks for real estate investment trusts (REITs). “The actual implementation will depend on the tax treatment given to REITs. So, we have represented to the government and I am reasonably assured whenever the next finance Bill is presented in Parliament, this will find a mention. We have taken this up very strongly with the government so that the tax treatment is clarified and REITs can progress,” he said.

He added work was being done on a single account statement for investors across financial instruments and this would likely be out by the end of FY15.

On equity markets, Sinha expressed concern over companies’ diminishing interest to raise funds from the primary market. Companies that had secured Sebi’s approval to raise funds had either been withdrawing their draft red herring prospectus or letting the approval lapse, he said, adding primary markets had lost issuances worth Rs 60,000 crore due to such withdrawals and lapses.

Soon, the regulator is likely to come out with guidelines on crowd-funding, a process through which entrepreneurs raise money from a large number of smaller investors.

“We are coming out with new guidelines on matters such as crowd-funding because we want to encourage young entrepreneurs…who need to raise capital. Our main effort is to help younger people and new entrepreneurs to raise capital smoothly…our main aim is to ensure the investor is treated in a fair way,” said Sinha.