MFA and AIMA recently submitted comments to the London Stock Exchange (LSE) and to the Federation of European Securities Exchanges (FESE) urging for the exchanges to take a coordinated approach in reducing trading hours to 09:30 – 16:30 GMT. The letter to the LSE was in response to its consultation paper seeking comments on shortening trading hours. The Associations believe it is important for European exchanges to be coordinated in such a move and urged FESE to lead a coordinated approach among its members.
In the letter to the LSE (attached), we stated that a reduction in trading hours would:
- Lead to more concentrated liquidity during the trading day, which would be positive for market functioning;
- Need to be implemented in a coordinated manner with trading venues across Europe to ensure that it doesn’t lead to dislocation of liquidity;
- Give firms additional time to digest research and company announcements ahead of the market opening, potentially allowing them to make more informed trading decisions on behalf of their investors; and
- Improve the working environment for staff in both trading and operational roles, supporting staff well-being and making it easier for staff to balance work and family commitments. Over the medium term, we believe this can play a positive role in broader efforts to improve diversity, and notably gender balance, in the industry.
The Associations believe that setting trading hours from 09:30 to 16:30 GMT would be the optimal approach, preserving an overlap between the UK and US markets, while giving staff greater flexibility.