Europe's Traders Want Shorter Hours for Health, Diversity
Letter suggests opening hours of 9 a.m. to 4 p.m. London time, compared to current trading day that runs from 8 a.m. to 4:30 p.m.
(Bloomberg) --
Europe’s biggest buyers and sellers of equities say they should work a shorter day.
The Association for Financial Markets in Europe and the Investment Association asked exchanges in London and throughout the continent to consider cutting 90 minutes from their opening hours, citing the impact of technology and the evolution of trading patterns.
While promoting a more efficient marketplace, a shorter work day would also address concerns over work-life balance and gender diversity, according to the industry groups. And even at 7 hours (from 9 a.m to 4 p.m. London time), the European trading day would still be longer than in the U.S. and Japan and overlap with American markets. The current trading day in London runs from 8 a.m. to 4:30 p.m.
“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 industrywide approach,” said April Day, managing director and head of equities at AFME, which counts the world’s biggest banks and asset managers among its members, including Goldman Sachs Group Inc. and BlackRock Inc.
Twenty years ago, the situation was different: Europeans were lengthening their hours as financial markets boomed, positioning themselves as the logical center of global finance by straddling the U.S. and Asian trading days and hoping to prevent the Americans from taking liquidity in Europe’s biggest stocks. In March 1999, the London and Frankfurt exchanges agreed to synchronize their trading day -- with the Brits having to wake up an hour earlier: U.K. trading moved to 8 a.m. from 9.
Read More: in 1999, London, Frankfurt Extend Hours and Synchronize Trading
Today, the City of London is grappling with multiple reports of sexual harassment and a macho culture. In the world of equity trading, the expectation of working long hours has made it harder to recruit people with family commitments, and it “impacts on traders’ mental health and well-being,” according to the letter from the industry groups, which was released Thursday.
Structural changes in the way stocks are traded are also lessening the appeal of the long trading day. London Stock Exchange Group Plc Chief Executive Officer David Schwimmer said recently that investors are increasingly waiting to closing auctions to buy and sell, rather than making trades across the course of the day. Some market watchers have linked that phenomenon to the growth of exchange-traded funds that rely on end-of-day prices.
LSE said it will consult with members and customers on the proposals, while a spokeswoman for CBOE Europe said a shorter trading day was an interesting concept worthy of discussion. So did Stephane Boujnah, who runs Euronext SA, owner of the French and Dutch exchanges.
Banks and brokerages also weighed in. Alasdair Haynes, who runs Aquis Exchange Plc, a pan-European equity trading venue, said he’s supportive of the initiative. However, he would like to see a trial on a subset of exchanges across Europe first, and “real evidence that shorter hours will enhance markets.”
Ben Springett, who heads European electronic trading at Jefferies Financial Group Inc., said compressing the day’s trading could improve efficiency and reduce transaction costs, but the human side would be important as well.
“I have spent a significant amount of time understanding the challenges that a long trading day presents for people managing their work-life balance, and a reduced duration would naturally make this easier,” said Springett, who also co-chairs the firm’s Women’s Initiative Network.
Michael Barsuhn, head of trading at Flossbach von Storch in Germany, said that the measures could help get more women into finance and reduce trading costs, but won’t be sufficient to change the work-life balance on their own. “It does very little without a change in corporate culture and management thinking,” he said.
Meanwhile, some working in the 24-hour derivatives markets rolled their eyes. “It’s quite interesting to see equity traders complaining about working hours,” said Anthony Cohen, a futures and options broker at GFI Securities in Paris. “If I could work from 8 a.m. till 5:30 p.m. every day, it would almost feel like a holiday.”
Equity traders in the U.K. have an average base pay of 107,000 pounds ($137,000), according to Glassdoor, a job and recruiting website.
--With assistance from Jan-Patrick Barnert and Michael Msika.
To contact the reporter on this story: Viren Vaghela in London at vvaghela1@bloomberg.net
To contact the editors responsible for this story: Ambereen Choudhury at achoudhury@bloomberg.net, Keith Campbell, Marion Dakers
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