The fiasco around extended trading hours for the Indian stock exchanges is a perfect example of the left and right legs walking in opposite directions. The incident highlights the arbitrariness of the decision-making process at the BSE and the NSE.
SEBI has been working on longer trading hours, and issued an “enabling” provision to allow stock exchanges to enhance trading hours (9 am to 5 pm). Then, without warning, on 16th December, we witnessed a farcical and absurd comedy.
- First, the BSE decided to start trading 10 minutes earlier than normal (9:45 am) on the following Friday
- The NSE (not to be outdone) announced they would start at 9 am
- The BSE (not to be outdone either) followed suit
- Brokers at both exchanges reacted strongly, and opposed the idea vehemently
- Taken aback by the resistance, the exchanges put off the date by two weeks to 4 Jan, 2010
Surveys conducted by broker associations showed majority (79% of BSE members and 62% of NSE members) were opposed to the move. Opponents said infrastructure was not in place, the notice was too short and that this would disrupt the private and family lives of all those engaged with the stock markets!
- So what is going on?
- How is that BSE and NSE take such decisions without consulting members?
- Is oneupmanship (or hatred of the opponent) driving stock exchange decisions?
- Did anybody bother to ask investors what they think?
I’d love to get some answers, so please let me (and readers) know what you think.
I have one more question. Given the resistance and implementation hassles, one assumes there will be significant and tangible benefits. I haven’t seen these benefits clearly enumerated or quantified. So if you know why extended trading hours are desirable, please post below.
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Barely a day after writing this post, I received a press release from the BSE Broker’s Forum, which is reproduced below. Kind of makes my point, don’t you think, if they have to involve politicians to canvas with their own management?
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Date: Thu, 31 Dec 2009 15:33:47 +0530
Subject: MEDIA UPDATE
From: BSE BROKERS FORUM
MEDIA UPDATE
BSE Brokers Forum demands reconsideration of Market opening at 9 am
Today morning there was a conference call between members of BSE Brokers Forum, ANMI and Member of Parliament-Mr.Millind Deora. In this call both the associations jointly requested Mr.Millind Deora to help them to resolve this issue.
Mr.Milind Deora assured his support to broking community and other stake holders and emphasized the need for both the exchanges to consult their brokers and come to a mutually acceptable solution. He also assured the brokers that he will do everything to represent their case to concerned authorities.
BSE Brokers Forum is hopeful that the issue at hand will be resolved amicably at the earliest.
Bhanubhai Fozdar
Chairman
BSE Brokers Forum
808A P.J.Towers, Dalal Street, Fort, Mumbai 400 001
bsebrokersforum@gmail.com
Place : Mumbai
Date : December 31, 2009
Tel: 022 – 22723704
DISCLAIMER:
This media release has been provided to you for onward transmission through your respective media. You may use the same with due credit to the BSE Brokers Forum. Care should be taken to ensure that the meaning and context of the release is not changed in any manner. In case any clarification is required, kindly contact Ms. Vijayalaxmi T., Officer, BSE Brokers Forum, 808A P.J.Towers, Dalal Street, Fort, Mumbai 400 001 Tel (022) 22723704 email bsebrokersforum@gmail.com .
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Respected Sir,
Personally, as Trader, I would not like a change in the timing with longer working hours. As correctly pointed out earlier, it would disturb the personal lives many people.
This arbitrary move without consensus from all directly affected by this major decision is unfortunate, but we Indians are used to such high handedness and unfortunately will have tolerate the injustice.
Regards,
Srikanth
i think it is good that market will start trading from 9 so i can have some more hours for trading
I think it will be a good move it can increase the overall volume and the traders will also have more time to spend on market. But they (BSE & NSE) should give a prior notice of at leat one year.
Regards,
The whole idea of extended trading hurs to increase volumes and to bring the volumes of SGX Nifty here was absurd and has proven wrong. Now will the exchanges come and honestly agree that the decision to extend the trading was wrong and against democratic norms.
If the logic of allinging our markets with the world markets is accepted than why not have a 24 hour market so that we are in tune with the US too.
Further have the exchanges made their staff report early?Alteast I havent seen so , as always they are not in the office or are in a socalled meeting just like the BABUS of mantralay.
A large number of service holders and wage earners are involved in the trading in stock markets.The timing of the stock markets clashes with their work hours and they are unable to avail enough time for trading.Therefore, the BSE/NSE authorities and the Trading community should device working hours that will be suitable to the vast majority of investors – not just the professional investing class.