The Commodity Participants Association of India has moved the market regulator Sebi to restore the commodity derivatives trading up to 11.30 pm due to intense volatility in trading.

SEBI had reduced the trade timing of commodity market to 5.30 pm from last Monday due to complete lockdown announced by the Government on the back of Covid-19 crisis.

Following this, CPAI had conducted a survey amongst its members on Wednesday for rolling back timings. About 70 per cent of its members were in favour of rolling back.

Their staff are now able to travel to offices as curfew passes have been issued and broking is classified as essential services. In addition to this, many of them are now able to work from home. Hence, at operation level, things have comparatively improved in last 5-6 days.

The association has shared the survey figure with exchanges and regulators. Based on survey results we have mentioned if exchanges want then timings may be rolled back, said a CPAI spokesperson.

According to sources, SEBI is likely to ask commodity exchanges to revert to the normal practice of trading till 11.50 pm, mid-night. This is after several members of CPAI raised a concern that trading volumes were falling sharply due to truncated market timing. Many brokers, especially those having online operations, have told CPAI that they will manage to keep their services running, the sources said.

Those mainly doing algorithmic trades take their cues from US markets when they open for trading at around 7.30 pm India time. Algo volumes quickly form more than 50 per cent of the intra-day trades. Brokers experienced that they were losing out on these volumes if Indian markets close at 5 pm, the sources said.

While equity markets close by 3.30 pm, commodity markets in India have always traded between 10 am to 11.50 pm. Brokers were earlier of the view that they could shut down their office servers only past mid-night after commodity markets closed. Such a situation led to tremendous pressure on brokers and commodity exchanges for operating in the current situation as employees too are unwilling to wait till mid-night, the sources said. Following these complaints, CPAI had written to SEBI and sought shorter trading hours.

Related Topics