A leading association of stock brokers today asked both Bombay Stock Exchange (BSE) and National Stock Exchange (NSE) to maintain status quo on trading timings until the infrastructure required for extending the hours was in place.
However, the NSE said it would not go back on its decision to extend the hours.
The Association of National Stock Exchange Members (ANMI) today made a final attempt to perusade both the exchanges to stick to the current opening time of 9.55 am instead of the proposed 9 am.
"The response from the exchanges was not positive. Though we cited issues like the weak clearing system of domestic banks, NSE said the exchange was ready with the infrastructure and would see to it that trading went on smoothly," ANMI President ENC Palaniappan said after meeting NSE and BSE executives.
ANMI's alternate president, Anil Bagri, said they would continue trading even if the markets opened early and would not take the extreme step of going on a strike. "Stopping trading will not only hurt brokers but will also be detrimental for investors," said Bagri.
The BSE Brokers Forum issued a statement in the evening supporting the ANMI's demand.
As many as 62 per cent brokers were opposed to the new timings, Palaniappan said, adding that the move would make it difficult for brokers to come to work early in metro cities due to commuting problems.
The ANMI said it would monitor the market infrastructure closely from Monday and then decide its future course of action.
For brokers, arranging margin funds from clients could be a problem after the new timings come into force as banks do not open around 8 am. Also, brokers say that the real time gross settlement system, where cheques are cleared in a few hours, has operational issues. Also, RBI recently told banks to classify only cheques of Rs 10 lakh and above for high-value clearing. Other cheques could take two days to be cleared.
According to sources, while several bank management have expressed willingness to open early in the morning, this has not gone down well with the employee unions. "The Reserve Bank of India has to only issue a circular and ask banks to open an hour early and streamline their real time gross settlement system. However, the employee unions are opposed to opening early. The issue is a live wire and can snowball into a major controversy," said a broker.
The NSE said there was "no truth" to speculation it would postpone the start of extended trading hours next year.
"There is absolutely no truth in that," Ravi Narain, chief executive officer of the exchange, said in a phone interview to Bloomberg. "I am able to confirm that we are going ahead with January 4, 9 am."
