Europe Exchanges Reject Shorter Trading Amid Virus Turmoil
The DAX Index curve sits on display inside the Frankfurt Stock Exchange, operated by Deutsche Boerse AG, in Frankfurt, Germany. (Photographer: Alex Kraus/Bloomberg)

Europe Exchanges Reject Shorter Trading Amid Virus Turmoil

Some of the biggest exchanges in Europe have poured cold water on proposals to shorten the equities trading day, undermining a campaign to give traders a better work-life balance.

The Federation of European Securities Exchanges, which represents venues including Deutsche Boerse AG and Euronext NV, said in a statement Wednesday that cutting hours would be detrimental to European markets and shareholders.

“The Covid crisis has shown that investors need transparent price formation and the flexibility to trade early and late in the day,” Rainer Riess, director general at FESE, said in a telephone interview. “The overlap with Asia and the U.S. really matters because of higher liquidity.”

The rejection comes weeks after London Stock Exchange Group Plc, which has one of the world’s longest market days, said most traders it surveyed favored shorter hours. The LSE has said it would await responses from other European bourses before acting on calls from investor groups to shorten market hours to improve traders’ health and inject diversity into a largely male profession.

Euronext’s own consultation closed for responses on June 30. A spokeswoman said the company will release its findings this month with a detailed assessment of the impact of any change.

“We fully agree with FESE’s position,” said a Deutsche Boerse spokesman. “European exchanges provide crucial functions to the real economy. Important mechanisms for conducting transactions and price formation, as well as risk and asset transfers, would be restricted in the course of a shortening of trading hours.”

London’s trading day runs from 8 a.m. to 4:30 p.m. while European exchanges vary. Deutsche Boerse and Euronext’s stock markets match London with opening hours of 9 a.m. to 5.30 p.m. local times, according to FESE records.

“Shortening European trading hours would be misguided, particularly in a time of high volatility and market uncertainty where all investors need access to capital,” said a spokesman at Nasdaq Europe, which operates venues in the Nordics.

FESE also said:

  • Current trading hours in Europe allow investors to manage their positions and risks over the day in very liquid, transparent and efficient central limit order books.
  • Europe’s trading day provides for interaction with other global markets.
  • The length of the trading day in Europe does not directly affect working hours, as firms provide other services outside equity markets. Employee well-being could be improved in other ways within companies.

However, the comments don’t mark the end of the campaign for shorter hours, according to April Day, head of equities at the Association for Financial Markets in Europe, one of the groups lobbying for a change.

“To take such a negative position ahead of listening to what market participants are saying is extremely disappointing,” she said on Wednesday. “We here hoping all the exchanges would acknowledge there’s demand from their members and their clients to make this change to benefit market liquidity as well as culture and diversity.”

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