SIX trader survey reveals optimism about shorter trading hours

Maria Nikolova

Majority of traders feel cutting trading hours would result in a number of operational benefits, including encouraging more trading liquidity.

Most participants in a recent trader survey conducted by SIX are optimistic regarding proposed reduction to trading hours.

SIX has conducted the trader survey in the final quarter 2019, with 126 respondents from across Europe, of which 66% traded in shares, 13% in Fixed Income, 13% in Structured Products and 5% in ETFs/ETPs or other products.

When asked about the reduction of trading hours, a majority of traders feel the move would result in a number of operational benefits, including encouraging more trading liquidity (36% of respondents). Less than one-tenth of survey participants (6%) believe that shorter trading periods would increase the cost of trading.

These responses were given in light of public consultations made by the UK Investment Association. The industry body, which represents City firms with GBP 7.7 trillion in assets under management, proposed to cut stock market trading from 8.5 to 6.5 hours for the purpose of making work more accessible to women and working parents.

The London Stock Exchange is currently consulting on a potential adjustment to trading hours. LSE seeks feedback on the following potential proposals for Equity trading hours:

  • A. 08:30 – 15:30 London time or
  • B. 08:30 – 16:00 London time or
  • C. 09:00 – 16:00 London time or
  • D. 09:00 – 16:30 London time or
  • E. Maintain the current time of 08:00 – 16:30 London time.

The list of potential impacts from adjustments to trading hours includes:

  • Reduced overlap with US trading hours if the market close is earlier, or reduced overlap with Asian trading hours if the market opens later, with potential negative impact for Asian or US trading participants;
  • Given major trading desks are pan-European, all main European trading venues would need to be aligned to maximise benefits;
  • Changes to regulatory reporting times would require regulatory approval and also commitments regarding trading on Systemic Internalisers (SIs) and OTC.

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