The internal working group was of the opinion to extend the OTC forex and exchange traded currency derivatives markets till 9 pm, and recommends that the call market timings may be extended till 6 pm co-terminus with RTGS customer window.
IT also recommended cut-off time for commercial papers (CPs), Certificates of deposits (CDs) secondary market trading should be fixed at 5 pm, and asked to retain the trading time for government securities.
Comments on the draft report are invited till July 31, RBI said.
“While the decision of market timings is best left to market participants, there is a need to review market timings across all products and funding markets to ensure that they complement each other and thereby avoid unanticipated frictions,” RBI said in its draft report.
“ Further, extension of trading hours would depend on the availability of an efficient and adequate support infrastructure in terms of trading, clearing and settlement. Issues like margin calls, posting of margins, line of credit etc., in an extended market timing scenario need to be considered,” RBI said in the report.
RBI noted that since major payment systems in India (RTGS and NEFT) are available till 7 pm and funding markets (call, TREPS and repo) are all closed by 5 pm, any unanticipated margin calls or funding requirement beyond 5 pm could pose a challenge to the cash and risk management of exchanges or market participants.
“Similarly, it will have cost implications for various stakeholders such as banks, brokers, custodians, regulators etc., in terms of availability of infrastructure and manpower,” RBI said.
In the event of extension of forex trading hours, the trading hours may be such that they cover EU and US sessions’ overlap as this will facilitate to sufficiently capture movements in European markets and part of US markets, RBI noted.
https://economictimes.indiatimes.com/markets/forex/rbi-panel-proposes-extension-of-forex-market-timing/articleshow/70162921.cms
2019-07-10 15:54:00Z
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