The Association for Financial Markets in Europe (AFME) and the Investment Association (IA) have called for shorter trading hours in a bid to boost staff diversity and wellbeing, today.
Shortening the trading day by just 90 minutes would not only improve work-life balance, but also give the male-dominated industry a much-needed diversity boost, according to the finance bodies.
“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 industry-wide approach,” states April Day, Managing Director, Head of Equities at AFME. “A shorter trading day would not only improve market structure but would also go a long way towards building a more diverse trading floor and fostering better mental health.”
LONG HOURS CULTURE
In a joint letter to the LSE and other European trading venues, AFME and IE have requested a review into equity market opening hours across Europe, proposing that operating hours be shortened by 90 minutes. The current 8.5 opening hours at major trading venues in Europe are some of the longest in the world, compared to other global markets, such as the US (6.5 hours) and Asia (6 hours), with traders expected to start their day long before markets open and close, according to AFME and IA’s Proposal for a Review of Market Hours in Europe.
The bodies estimate that the average trader in Europe works a 12-hour day starting at 6.30am, putting in more than 60 hours week, which is well above the 48 hours (including overtime), stipulated by the European Working Time Directive, for health and safety. This ‘long hours culture’ means that traders are often sat hours at their desk in an industry where lunch breaks are often still frowned upon, which is not conducive to good mental and physical wellbeing. AFME and IA believe the proposed shortened day would improve work-life balance, as well as create more diverse and inclusive trading floors.
BETTER WORK-LIFE BALANCE
The ‘long hours culture’ is also a key obstacle to recruiting and retaining more diverse talent, particularly those with family or caring commitments, they add. A shorter day would attract talent from a more diverse talent pool, particularly more women.
“Traders coming into the industry are increasingly required to have highly tuned coding skills as well as the traditional mathematical and technical requirements. Such disciplines are dominated by men in academic institutions,” states the proposal. The predominantly white male image doesn’t help either, as it’s a “deterrent for people from other groups who might otherwise be interested in working in the sector,” it adds. This means new people coming into the industry are drawn from a narrow pool. So, “unless something is done to tackle this problem now, trading will continue to lag behind a wider asset management and financial services industry that is moving to a new and better approach,” concludes the proposal.
Photo credit: Gerd Altmann from Pixabay
ATTRACTING BROADER DIVERSITY
“We need to improve the ways our businesses work to create more inclusive environments where all employees can thrive. Shortening trading hours, enabling a better work-life balance could bring significant benefits to City workers and firms, who will be able to attract a broader diversity of talent,” points out Galina Dimitrova, Director of Capital Markets at the Investment Association.
“We have heard many deeply moving stories of traders’ mental health and personal life being impacted by their working hours. Whilst it is no silver bullet, we hope this European-wide review could start to lead to a step change in more efficient markets to the benefit of savers and those who operate them,” he adds.
Trading companies also benefit financially, according to AFME and IA. The first hour of trading often attracts little liquidity and subsequently is a more costly time to trade, while the final hour attracts around 35% of total daily volume. So a shortened day is a win-win for both traders and trading companies.
Click here for a link to the AFME & IA proposal.
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