London Stock Exchange considers shorter trading day
The London Stock Exchange is to consider lopping 90 minutes of
the trading day in a bid to improve mental health and attract more women and
working parents to a high-pressure environment known for gruelling hours.
The LSE made the announcement after City lobby groups sent a letter to nine
exchanges, including Germany’s Deutsche Boerse and the Amsterdam-headquartered
Euronext, urging them to adopt the proposal.
The Investment Association, which represents City firms that have £7.7tn in
assets under management, and the Association for Financial Markets in Europe
(AFME), said that the 8[1/2]-hour European trading day was one of the longest
in the world but did not deliver “material benefits to savers, investors or
firms”. In Asia, the trading day is usually six hours, and in the US it is
6.5hrs.
The lobby groups said shorter hours would improve market structure and have “a
significant positive impact on individual employees and … our industry’s
ability to attract a more diverse talent”.
The London Stock Exchange is open between 8am and 4.30pm, while other equity
markets across Europe follow the same opening and closing hours on local time.
The IA estimates that the average trader works around 60 hours a week, as
extra time is put in before and after the trading day to prepare and then
finalise trades.
“The addition of commuting time only exacerbates this problem. Anyone with
family commitments is less likely to be willing or able to spend such long
hours in the office,” the lobby groups said.
Figures from the Financial Conduct Authority last year show that only 13% of
staff permitted to take part in regulated activities at trading firms were
women. That number was only slightly higher, at 16%, at investment management
firms.
AFME and the IA said the lengthy hours were also putting a strain on workers’
mental health. “The physical drag on individual staff is also significant.
Staff are habitually doing a 10-hour working session at their desk in an
industry where lunch breaks are often still frowned upon. This is not
conducive to good mental and physical health.”
A compressed trading day would also make markets more efficient, as trading
activity tends to be weak at the start of the session and jumps at the market
close, the groups said.
A London Stock Exchange 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.”