The London Stock Exchange Group (LSEG) is actively exploring the possibility of implementing 24-hour trading to enhance the UK market’s attractiveness to investors. This initiative comes in response to growing pressure for increased competitiveness and aims to align the exchange with global trading practices, according to a report from the *Financial Times*.
LSEG, which oversees Britain’s primary stock market, is examining the feasibility of extending trading hours beyond the current schedule of 08:00 to 16:30. Sources familiar with the discussions indicate that the group is “absolutely looking at it,” considering both 24-hour trading and other extended trading options. The discussions involve significant commercial, policy, and regulatory considerations.
Global Context and Competitive Pressures
Currently, cryptocurrencies such as bitcoin operate on a 24-hour basis, and retail trading platforms like Robinhood have seen an increase in after-hours trading. In contrast, shares listed on the London exchange are restricted to daytime trading, which limits their availability compared to other markets.
LSEG is evaluating several critical factors regarding the extension of trading hours, including the necessary technology, regulatory challenges, and the potential impact on liquidity and companies with dual listings. Other global exchanges are also pursuing similar initiatives. Last autumn, the New York Stock Exchange petitioned the US financial regulator to extend its trading window from the traditional 09:30 to 16:00 to a broader period from 01:30 to 23:30.
While extended trading hours may present opportunities, they also raise concerns. Some brokers argue that longer hours could complicate the clearing and guaranteeing of trades, necessitating significant adjustments in technology and staffing. Additionally, managers of open-ended funds, which typically calculate their values once daily at 16:00, may face challenges in adapting to new trading hours.
Despite these concerns, extended trading hours could benefit investors, particularly on the US west coast, where the official market close occurs at 13:00 due to time zone differences.
Impact of Regulatory Changes and Market Shifts
The discussions surrounding the potential extension of trading hours come amid a broader effort to enhance the competitiveness of the UK stock market. This follows several high-profile companies’ decisions to shift their listings to the US in pursuit of better liquidity and valuations.
Most notably, the online payments company Wise, which has been listed in London since 2021, announced last month its intention to dual list its shares in both the US and the UK. Similarly, the construction equipment rental company Ashtead made a similar transition last year. Other firms, including Flutter Entertainment and CRH, have fully relocated their listings to the US market.
The UK government’s efforts to reassess regulatory frameworks are also part of this competitive drive. In a recent speech, Rachel Reeves, a prominent political figure, highlighted that existing rules and red tape are hindering business growth and innovation. She described the current regulatory environment as a “boot on the neck” of companies, emphasizing the need for bold reforms to stimulate economic development.
At present, the London Stock Exchange Group has declined to comment on the ongoing discussions regarding extended trading hours. As this initiative unfolds, it remains to be seen how it will impact the overall landscape of the UK’s financial markets.
