Traders in the investment management and banking industries have continued their call for a reduction to market trading hours, making the case to the pan-European exchange, Euronext.
Responding to the Euronext consultation which closes today, the Association for Financial Markets in Europe (AFME) and the Investment Association (IA) have called for market trading hours to be shortened by 90-minutes to seven hours, from either 10:00-17:00 or 10:30-17:30 (CET).
This latest consultation follows from that of the London Stock Exchange (LSE), which published its results at the beginning of June, and found that a ‘significant majority’ respondents supported the arguments for a shorter trading day.
AFME and IA have now made the case to Euronext that a reduction of 90 minutes in European markets would concentrate liquidity creating more efficient markets - a move which would ultimately benefit savers and investors. Currently, 54% of trading on Euronext markets takes place within the last two and a half hours of trading (16.30-17.35), nearly a quarter of which is trading in the final five-minute closing auction.
The present long hours culture also impacts on traders’ mental health and wellbeing and has been identified as a key obstacle in recruiting and retaining more diverse talent. It is hoped the proposed shortened day would have an impact on workplace culture and provide a necessary step towards creating more diverse and inclusive trading floors across Europe.
April Day, Managing Director, Head of Equities at AFME, said: “The Covid-19 crisis has shown us that different work patterns can be effective, and the case for reduced market hours has never been stronger. I am pleased to see Euronext taking part in this debate, and I hope Europe will take the lead in reducing market hours to create more efficient markets and improve culture and diversity in our industry.”
Galina Dimitrova, Director of Capital Markets at the IA, said: “We need to call time on Europe’s outdated trading hours, which no longer reflect the reality of how markets function and hold back the creation of more inclusive workplaces. The results from the London Stock Exchange consultation were clear; the case for shorter hours has been made and traders want to see change. We will look forward to the outcome of the Euronext consultation and hope that this will lead to the reduction in market trading hours.”
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