Financial Traders Call for Shorter European Trading Hours
Traders in the investment management and banking sectors are calling on trading venues across Europe to review their opening hours in a bid to improve mental health and promote diversity.
In a proposal sent to the London Stock Exchange, NasdaqOMX, Deutsche Börse and other European trading venues, the Association for Financial Markets in Europe (AFME) and the Investment Association (IA) have requested a review of equity market opening hours.
Opening hours in European trading venues are from 8am-4.30pm GMT/9am-5.30pm CET.
The proposed aim of the requested review is to shorten opening hours that would see trading venues operate from 9am – 4pm GMT/10am – 5pm CET).
According to the proposal the reduction would see markets become more efficient and would have significant benefits for both savers and investors.
A statement from the AFME says that ‘the first hour of trading often attracts little liquidity and subsequently is a more costly time to trade, while the final hour attracts around 35% of total daily volume.’
It says that ‘shortening the hours would concentrate liquidity leading to more consistent trading costs and provide greater time for traders and the market to digest corporate announcements.’
Europe’s operating hours for trading are amongst the highest in the world. The standard 8.5 hours operation time in Europe compares with 6.5 hours in the US and 6 hours across Asia.
Improvements to mental health and well-being for those working in the sector are amongst the key drivers of the proposal.
Citing anecdotal evidence the proposal states that ‘trading remains one of the areas of financial services where staff face significant mental health issues. Although, due to the (historical) stigma attached to such conditions, individuals are often very reticent to report such problems. As such empirical data is not readily available to demonstrate this connection. We consider that the excessively long hours play a major contributory part in generating and perpetuating this problem.’
It claims that current operating hours are also a barrier to attracting a more diverse workforce – particularly potential workers with ‘family or caring commitments.’
Commenting on the situation, April Day, Managing Director, Head of Equities at AFME, said, ‘AFME and the IA are currently in discussions with the major European cash equity exchanges to explore a reduction to trading hours. A shorter trading day would not only improve market structure but would also go a long way towards building a more diverse trading floor and fostering better mental health. Equities trading risks lagging behind a wider financial services industry push for more diversity and inclusion unless the long trading day is tackled by an industry-wide approach.’
(Image: AhmedArdity via Pixabay.com)