The Reserve Bank of India (RBI) and the Securities and Exchange Board of India (Sebi) are working to synchronise trading time for equity, bond and commodity markets, said a report by the Economic Times (ET).
"The Reserve Bank of India (RBI) and the Securities and Exchange Board of India (Sebi) are exploring the possibility of synchronising trading time for all markets — stocks, bonds, currency and commodities," the report said quoting two people with knowledge of the matter.
If the development comes into reality, it will be hugely beneficial for investors who bet across asset classes as well as for the back-end staff at intermediaries.
“The central bank has started working on a plan. Inter-regulatory discussions are now examining the feasibility of such a proposal. The RBI has sought comment from market participants on the proposal," the report further added quoting sources.
Meanwhile, RBI governor Shaktikanta Das on April 8 announced that financial markets including bonds, rupee, interbank call money and tripartite repo would open at 9 am from April 18. However, closing would continue to be at 3. 30 pm — it was 5 pm before the pandemic.
In the domestic equity market, the pre-open session starts at 9 am, while regular trading happens from 9. 15 am to 3. 30 pm.
In the sovereign bond market, as per the ET report, most of the trades typically happen in the first half of the trading session. If it closes early in line with the equity market timing, volumes are unlikely to be affected.
The equity market follows the 'T+2' rule for settlement which means settlements take about two days to complete while for government bonds, settlement happens in one day as it follows the 'T+1' rule.
Corporate bond trading typically follows the T+1 rule for settlement, but some of them may show T+0 or T+2.