MANILA, Philippines - The Philippine Stock Exchange (PSE) is making a slight change in trading schedule as it will extend the â€œpre-closeâ€ period starting next month.
â€œThe Securities and Exchange Commission, in its letter dated Sept. 26, informed the PSE that the commission approved the amendments to the Revised Trading Rules and Implementing Guidelines,â€ the local bourse said.
The pre-close period will be stretched to five minutes from three minutes starting Nov. 4. The pre-close phase allows trading participants to enter orders, which will be matched using the computed closing price for a security.
With the revision, pre-open will start at 9 a.m., followed by market opening at 9:30 a.m., market recess at noon, resumption of afternoon trading at 1:30 p.m., pre-close at 3:15 p.m., run-off at 3:20 p.m., and market closing at 3:30 p.m.
In July, PSE sought public comments after its board of directors approved the longer pre-close auction period.
The revision will align with practices in the region, with Hochiminh Stock Exchangeâ€™s pre-close period at 15 minutes, followed by Indonesia Stock Exchange and Stock Exchange of Thailand (10 minutes), Singapore Exchange (six minutes) and Bursa Malaysia (five minutes).
It will also â€œallow the trading participants to assess and counter a sharp price move at the close,â€ the PSE said.
â€œSome trading strategies being used may require more time for the trading participants to react depending on market conditions,â€ it added.
Trading participants are also seen to benefit from the extra time to execute orders.
Exchange-traded funds and index funds, which are mostly benchmarked against the closing price of underlying stocks, can take advantage of the extended pre-close period.
â€œIf a basket of underlying securities is composed of a large number of stocks, this may require longer time for trading participants to execute orders in order to minimize impact on prices of the securities,â€ the PSE said.
In 2010, the operator of the countryâ€™s sole stock exchange introduced a three-minute pre-close period, along with the launch of its new trading system PSETrade.
But last year, the PSE extended its trading hours up to 3:30 p.m., resulting in a total of four hours and 30 minutes of trading, up from the previous two hours and 40 minutes in which trading ends at 12 noon.