Sebi examining proposal for extended derivative trading hours: Report

India's market regulator is examining a proposal from the country's top exchange to extend trading hours for index derivatives but a final decision has not yet been taken, two sources with direct knowledge of the matter said on Wednesday.

The National Stock Exchange (NSE) has sent a proposal to the Securities and Exchange Board of India (Sebi) to have an evening session to trade in index futures and options to help investors to hedge risks, an NSE official told Reuters.

Sebi is assessing whether the extended hours will fuel already high derivative trading volumes and if the trade settlements will be smooth, one source said.

"For smooth settlement of trades, both the NSE and BSE (Bombay Stock Exchange) and their respective clearing corporations need their systems to be prepared to handle extended trading hours," this person said.

If asked by the regulator, the BSE is prepared to facilitate evening trades, an official familiar with the BSE's thinking said.

All the sources declined to be named as they are not authorised to speak to the media. Sebiand BSE did not immediately to a Reuters email seeking comment.

The NSE has proposed extended trading between 6 p.m. IST to 9 p.m. IST, with evening-session trades to be settled the next day, said Sriram Krishnan, NSE's chief business development officer.

He said that cash equities and single stock options have been kept out of the pilot plan.