At the end of last year, the London Stock Exchange issued a consultation on market structure and trading hours. This has been a long time coming; currently, the London market is open for eight-and-a-half hours. We believe that shorter trading hours offer several benefits to the private investor, and have thus submitted a proposal that 08:30-15:30 is the most suitable of all available options.
Many private investors are not investing on a full-time basis and have a career alongside running their portfolios. With the market opening early and the regulatory news service (RNS) announcements rolling from 07:00, this means that family commitments or the morning commute can interfere with precious time reading results or announcements. For retail traders, a long London session means long hours at the screen. Nobody wants to miss out or see positions move against them while they’re away from their platform.
We have also proposed a reduction in SETSqx auctions in order to focus liquidity into remaining auctions. This increases the chance of uncrossing. The intraday auction at noon suffers from poor liquidity – and so we feel that in its current form it should be removed.
The SETSqx auctions are the only chance in the trading day to participate in the market without using a market maker. Poor liquidity in these auctions deters people from making orders, as one could be filled in a small quantity. We believe that if these intraday auctions were used properly, we would see better fills and more uncrossing trades. Many investors are deterred by wide spreads, and so an improvement in liquidity would see these spreads narrow.
You can read our response in full and join IC’s campaign at: https://www.change.org/ICresponse. The deadline for submissions is 31 January 2020, and it is our chance to have our voices heard.
