SEC okays extension of PSE trading hours

The Securities and Exchange Commission (SEC) will not get in the way of the Philippine Stock Exchange’s plan to further extend trading hours as long as the mechanics of the proposed off-floor system can be properly put in place.

SEC commissioner Joselia Poblador said they would not object to the planned revision in the schedule of the PSE’s afternoon trading session provided the brokers implement an efficient system for off-site deals.

Last week, the PSE board of directors approved a proposal to stretch the trading hours until 4 p.m. but tossed it to the floor trading and arbitration committee (FTAC) to determine its execution.

From the original schedule of 9:30 a.m. to 12 noon, trading has been extended by one-and-a-half hours in a bid to add volume to the trade turnover. The PSE started the extension last Feb. 20, wherein trading resumes after a one-hour break, from 1 p.m. to 2:30 p.m.

Following the FTAC meeting, the PSE said "it was decided that in order to determine the real sentiment of the PSE trading participants on the most acceptable trading schedule, there is a need to conduct a survey."

The committee, the PSE added, took into consideration the cost benefit effect on the brokers of the longer trading hours and implied that a survey is the most democratic method of determining the brokers’ sentiment and arriving at the proper decision.

From the survey, the brokers will have to choose from among three afternoon schedules: 1) the current 1 p.m. – 2:30 p.m.; 2) 1:30 p.m.-3 p.m.; and 3) 2 p.m.-4 p.m.

A local trader said if the concensus of the foreign brokers – who account for about half of the daily trade turnover – will be given more weight, the 2 p.m.-4 p.m. schedule would be in effect, although this would most probably be done off-site, which means the brokers can trade in their offices instead of using the PSE trading floor.

Foreign brokers, he said, would find no difficulty in trading off-floor since they already have the infrastructure to do so and would benefit from the longer trading hours since transactions would be aligned with the schedules in other markets abroad.

He added that the local, although much smaller, brokers, on the other hand, would tend to favor a continuous schedule of from 9 a.m. to 1 p.m. since this would mean more operational savings on their part.