Tuesday 10 December 2019 4:59 pm

London Stock Exchange launches consultation on shorter trading hours

The London Stock Exchange (LSE) has launched a consultation on shortening its trading hours following calls by industry bodies who said such a change would improve workplace culture and liquidity.

The stock exchange has asked its members – mainly banks and brokers – for its views on a series of options for shortening the current 8am-4.30pm trading day by up to 90 minutes.

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These include cutting hours to 8.30am-15.30pm, 8.30am-4pm, 9am-4pm or 9am-4.30pm, or leaving them as they are. LSE members have been asked to respond by 30 January 2020.

The consultation comes after two of the biggest industry bodies in Europe recently called on LSE and other stock markets on the continent to shorten the day. They said this would improve traders’ mental health and tackle the problem of low liquidity by concentrating transactions.

European markets are open for longer than other global centres, meaning traders’ days can stretch to longer than 12 hours. New York’s normal trading hours are 9.30am-4pm, while Tokyo has a 9am-11am session and a 12.30pm-3pm session.

The Association for Financial Markets in Europe (Afme) and the Investment Association (IA), which led the calls, said the long-hours culture is particularly bad for diversity as it is a problem for many women.

LSE’s consultation document recognised that among the benefits of a change were that it could help “encourage staff diversity” and have a “positive impact on mental wellbeing of staff”.

Yet it also said there were some potential drawbacks. These included “reduced overlap” with US and Asian markets, which could potentially damage London’s reputation as a bridge between global trading centres.

Another issue, the LSE said, was that “all main European trading venues would need to be aligned to maximise benefits”, which could be difficult to coordinate.

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Galina Dimitrova, director for investment and capital markets at the IA said: “We are very pleased the London Stock Exchange has listened to traders’ calls and is opening a consultation into market trading hours.”

“We need to call time on the long hours culture, which is detrimental to diversity and mental health, and inefficient for the markets. A shortened day will benefit the markets, those that operate them and ultimately the clients we serve.”