Q: Why do you think it’s been done?

Jain: It’s a good question but maybe you should ask this question to the regulators and exchanges—they will have better answers to this. I guess that we are trying to get align to international markets and also I think there was some apprehension that lot of market volumes from Indian markets are going to Singapore Nifty, which open earlier and if we have longer hours then we probably will have more overlapping time with the European market and the Singapore market and probably that will help make our volumes grow faster.

Q: The Singapore Exchange Ltd (SGX) starts trading at 7 in the morning; we are going to start at 9, if this is implemented. Is this really going to get back a lot of the SGX volumes or are people who trade on the SGX will trade SGX nevertheless?

Jain: It’s just like the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE)—they are together, but people who trade on BSE trade on BSE, nevertheless. So I don’t think it will take the volumes back and there will be arbitrage opportunities even on real time basis. And, as you rightly said that SGX starts at 7 am and there is no way we can match that time at this point, so this purpose will be fulfilled only partly. I think there is a broader purpose to align with international market in terms of timing should make the market wider broader. Most of the global markets are open longer hours something like 9 am to 5 pm but typically with a lunch break, which, I think, our regulator and exchanges will also consider.

And in the Indian context, if you look at stock market offices, most of them are not used to reaching office at 9 am; 30-40% of activities take place in Mumbai where people travel long distances, so it will be difficult for them—maybe 5 pm is manageable but 10 in the morning was more convenient time for them. That apart what will happen is we have T+2 system and there are a lot of formalities to be done in terms of pay in, pay out, exchange internal auctions and all kind of other things that go with this. So many large brokers probably will have to provide for second shift operations so that they can manage their back office and risk more prudently.

The another factor, which we should keep in mind that banks should also have timing which are coinciding with brokers because supposing there is a sudden volatile movement then the brokers are expected to put in their margin check immediately and the banks should be open. So I don’t know how they are going to manage this part. Normally they would expect money to be there otherwise they will shut the brokers’ terminals off and this will become a serious question when markets are too volatile to anticipate in advance and provide additional margin. So there are quite a few other questions that need to be answered before we move into this.