The Federation of European Securities Exchanges (Fese) has come out against shorter trading hours, arguing that any change would put the continent at a competitive disadvantage to other trading venues.
The statement comes a day after the UK’s Investment Association (IA) and Association for Financial Markets in Europe (AFME) made a final plea to pan European exchange Euronext, which is a vice president of FESE, to cut its trading day to seven hours.
The current European and UK trading day is 8 and a half hours, longer than those in Asia which is six hours or Wall Street at six-and-a-half hours.
Fund managers, banks and market makers have lobbied Europe’s exchanges over the past six months to shorten the day at both ends. They contend that the reduction would not only boost the turnover of shares but also facilitate investors executing large deals during the day instead of in the often-frantic end-of-day auction.
The London Stock Exchange, which is not a member of FESE, held a public consultation earlier this year that found broad backing for cutting the trading day by 90 minutes to improve mental wellbeing and help attract more women on to trading floors.
AFME and the IA have also said that a long-hours culture make it hard for working parents, discouraging diversity.
However, without a harmonised approach across Europe, the goals of shorter hours would be harder to achieve given banks have pan-European trading desks, the LSE has said.
Fese said curbing hours would benefit trading on alternative lightly regulated venues, since they would not be subject to the change. Investors, however, may not see better prices as a result.
Rainer Riess, secretary-general of FESE, said the current system was “fit for purpose and a change would be to the detriment of the European market”. Discussions over a shorter day were “a very UK-centric debate,” he added. “It hasn’t been echoed to the same extent in Europe.”
Euronext which has just completed its own public consultation on market hours, has also expressed scepticism about what it has called a “London proposal.”
US based exchange Nasdaq, which operates the Stockholm bourse, has said shortening hours would be “misguided”, and that any change would need to be a pan-European decision that also included off-exchange trading platforms.