Traders ask for reduced trading hours to improve diversity

TRADERS have called on the London Stock Exchange (LSE) and other European trading venues to review lengthy trading hours across Europe.

The latest move by traders in the investment management and banking industries has come in a bid to improve culture, diversity, and wellbeing on trading floors.

This is expected to help create more efficient markets and attract more diversity - women and working parents.

April Day, Managing Director, Head of Equities at Association for Financial Markets in Europe (AFME), said: “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.”

This culture of long hours impacts traders’ mental health and wellbeing. It has also been identified as a key obstacle in recruiting and retaining more diverse talent, in particular for those with family or caring commitments, AFME and Investment Association (IA) said.

The LSE is to consider lopping 90 minutes of the trading day in a bid to improve mental health and attract more women staff members.

The LSE made the announcement after the lobby groups sent a letter to nine exchanges, including European exchanges Deutsche Boerse and Euronext, urging them to adopt the proposal.

In a joint letter to the LSE and other European trading venues, the AFME and the IA on Thursday (7) requested a review into equity market opening hours across Europe, with a view to shorten operating hours from 8am-4.30pm, to 9am-4pm GMT.

The LSE is open between 8am and 4.30pm, while other equity markets across Europe follow the same opening and closing hours on local time.

An LSE Group spokesperson said: “We strongly support improving diversity and workplace culture across the city … We intend to consider the request in a formal consultation with London Stock Exchange’s global members and customers.”

A reduction of 90 minutes in European markets would create more efficient markets, benefiting savers and investors.

Currently, 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 per cent of total daily volume, IA said.

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.

Day added: “AFME and the IA are currently in discussions with major European cash equity exchanges to explore a reduction in 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.

The current opening hours for major trading venues in Europe are some of the longest in the world at 8.5 hours, when compared to other global markets, such as the US (6.5 hours) and Asia (six hours), with traders expected to start their day long before markets open and close.