Brokers for status-quo in trading hours, but will not boycott bourses  

December 30, 2009

Stock brokers on Wednesday asked both the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE) to maintain the status-quo in their trading hours, until adequate infrastructure is in place, reports PTI.

However, the traders will not boycott trading even if the bourses go ahead with their decision to start trading at 9am from 4th January as announced earlier this month, the Association of National Exchange Members of India (ANMI) said.

ANMI, which claims the support of 850 members, has approached stock exchanges, regulators and the Government to look into the extension of trading hours until adequate banking infrastructure is in place.

"The Association is of the view that it is necessary to maintain status-quo on the timing, till adequate infrastructure is in place. There should not be any hurry to extend the market timing," ANMI's president EMC Palaniappan told reporters.

Even if the trading starts at 9am on Monday, ANMI will monitor the efficiency and performance of trading continuously and provide feedback to its members, Palaniappan said.

The BSE Brokers Forum, a prominent body of BSE brokers, has also asked the bourses to retain the status-quo in the current trading hours till a consensus emerges on the matter amongst various market participants.

"We appeal to both the exchanges and authorities concerned to form a committee consisting of various stakeholders to deliberate on the matter and achieve a consensus, and till such time keep in abeyance the decision to extend market timings from 4th January 2010," the Forum said in a press release.

“After the press release by ANMI, it is quite clear that even ANMI, which represents the members of the NSE, is also of the opinion that the decision of both the exchanges to open the market at 9am should be reviewed in the interest of the capital markets,” the release added.

Reflecting the intense rivalry between the BSE and the NSE, both exchanges, earlier this month, had said that trading will start at 9 am from 4th January, nearly one hour before the current opening time, inviting protests from brokers and investors.

Although extended market hours seem inevitable in the long run, the current infrastructure and environment does not support the move, Mr Palaniappan said.

"A weak infrastructure will not be in the interest of any concerned party and investors may lose out in the short run," he said.

Citing a recent survey, ANMI said nearly 62% of its members are against the move, as extending the trading hours could put additional load on the system. However, nearly 38% members opined that extended timings will increase trading volumes.

The Association has urged the RBI to improve the banking infrastructure, as most of the banks across the country do not have RTGS facility, which is necessary for high-value transactions, he said.

The increase in trading hours at this juncture may not result in a sufficient increase in volumes, which would be essential to maintain adequate depth in execution of trades, Mr Palaniappan said, adding that a reduction in depth may act as a deterrent to investors, he said.

The move may also put undue stress on manpower, which will result in "poor productivity and costly errors" besides increasing attrition levels in the industry, he said.

— Yogesh Sapkale