Uniform trading hours may not be tenable for commodity derivative segments, says Commodity Participants Association of India

Commodity Participants Association of India (CPAI) on Tuesday said uniform trading time for all markets including stocks, bonds, currency and commodities may not be tenable for the commodity derivative segment.

The remarks come in the wake of media reports suggesting that the Reserve Bank of India (RBI) and the Securities and Exchange Board of India (Sebi) are exploring a possibility of synchronising trade timing for all markets.

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The move is aimed at ensuring ease of operations for investors across asset classes.

"We at CPAI feel that this may not be tenable for the commodity derivative segments," National President at CPAI Narinder Wadhwa said.

On one hand, there are factors like uniformity in settlement processes and timings across different asset classes, including equities and government bonds, and ease of operations. However, there is a crucial difference between other asset classes and commodities that are hard assets, he said.

According to him, commodity derivatives are much more global as these are generic in nature with global supply-demand equations impacting the investment decisions for hedgers and majority of the commodities can be referenced internationally.

Base metals, precious metals, cotton among others are traded till 11.30 am-11.45 pm and one of the main reasons is that these instruments are very actively traded on international exchanges like CME group, the President noted.

The CPAI, the apex pan-India association of participants in commodity exchanges and commodity derivative segments, urged Sebi and RBI to consider these factors that are specific to commodity derivatives.

On Monday, RBI announced that trading in markets regulated by the central bank, will start at 9 am onwards from April 18, with the restoration of pre-pandemic trading timings. The closing would continue to be at 3.30 pm. Currently, the markets open at 10 am.

In the equity market, the pre-open session begins at 9 am, while regular trading happens from 9.15 am to 3.30 pm.