The Securities and Exchange Board of India (Sebi) on Friday allowed domestic stock exchanges to extend equity derivatives trading till 11.55 pm, in a move aimed at attracting investors dealing in Indian products on overseas exchanges in Singapore and Dubai. The new timings will also help in better alignment with commodity markets — amid implementation of universal exchanges — which function till 11:55 pm.

Currently, the timings for both the equity cash and derivatives segments are 9 am to 3:30 pm. Since derivatives trading started in 2000, the trading timings of both futures and options (F&O) and cash market have remained linked.

Longer hours for the derivatives market, which is typically used by investors for hedging, will cater to investors operating out of Europe and the US and will also provide a tool for domestic investors to price in the news flow that comes after the market hours.

Sebi has said the extended timings will be applicable from October 1, the date set for integration of commodities and equity exchanges. Stock exchanges that wish to extend trading hours will have to seek permission from Sebi. The market regulator will evaluate the requests based on the risk management system and infrastructure of these exchanges.

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