INSUBCONTINENT EXCLUSIVE:
Mumbai: Even as the equity brokers are trying to figure out a way to cope with the longer trading hours on equity derivatives, many feel the
benefit of "real-time" alignment with global markets would outweigh infrastructure challenges.
Some Indian brokerage majors have already
started to shore up their manpower and other resources after the Securities and Exchange Board of India (SEBI) permitted stock exchanges to
extend trading hours for the equity derivatives from October 1, 2018.
The market regulator has allowed stock exchanges to set their trading
hours between 9 am and 11.55 pm, similar to the trading hours for commodity derivatives segment.
At present, trade in equity derivatives
takes place from 9.15 am till 3.30 pm.
Equity derivative are instruments whose value is at least partly derived from the underlying equity
Such derivates can be used to hedge the risk associated with taking a position on equity by setting a limit on losses.
"Currently too,
commodities markets are opened till midnight, so the learning and infrastructure is already in place
It is just about increasing headcounts, which can be better planned once more details are published by exchanges," Santanu Syam, Chief
Operating Officer of Angel Broking, told IANS.
"From customers' perspective it is a positive step as they can take benefit of any global
Currently most of them are not able to participate during such odd hours," he added.
"It's a welcome move as Indian markets would be aligned
with all major markets, beginning with Tokyo and (ending with) New York and all in between," Tradebulls Securities' Director and COO Dhruv
Desai said.
"As of now we see an escalation in the manpower of our advisory teams in the offline business and some minor staff increases in
the risk management and other back office units
We may need some staff to work on shifts as change settles down," said Desai, adding that the online business would have no impact as the
requisite infrastructure was adequate to manage the extended hours.
According to him, initially, the market volume would spread across the
number of hours, but over a period of time, the volume would increase in the market.
However, details are still awaited on risk management
system from stock exchange, working of clearing corporations, framework for settlement process, monitoring of positions, system capability
and surveillance systems.
The advantage of digital framework, which India currently has, will come in handy, said Equity99's Senior Research
Analyst, Rahul Sharma.
"All the market management processes are digitised
There should not be any transition issues for brokers
However, their fixed costs could go up as the brokers will need more manpower
Let's hope for the best that rise in volumes will offset the expenses," Sharma told IANS.
