Members of the Budapest Stock Exchange (BSE) oppose a European plan to shorten trading hours, financial daily Világgazdaság reports.
The plan for shorter trading hours was proposed by the Association for Financial Markets in Europe (AFME), an industry advocacy group with offices in London, Brussels and Frankfurt.
According to their proposal, trading hours should be limited to a maximum of seven hours compared with eight and a half currently in place. For example, the Budapest bourse is open from 8:30 a.m. to 5:00 p.m., while the AFME plan calls for opening hours of between 10:00 a.m. to 5:00 p.m. or 10:30 a.m. to 5:30 p.m. hours.
Their argument is that the general practice of eight and a half hours opening time on almost all major European exchanges is not conducive to a more efficient running of the market, but it does have a negative impact on the mental health of brokers who are increasingly leaving their jobs due to the stress associated with the job.
Another trade association, however, the Brussels-based Federation of European Securities Exchanges (FESE), of which the Budapest Stock Exchange is also a member, says the shortening of trading hours would lead to an advance of less regulated and hence less transparent trading platforms, while it would also reduce the trading possibilities with American and Asian markets which are in different time zones.
All Hungarian brokerages asked by Világgazdaság unanimously oppose the plan.
“We fundamentally do not support the shortening of trading times. The news affecting global and thereby Hungarian markets come in several waves during all hours of the day, it is important that we follow these, react to them, and this is also what small investors expect from us,” Péter Varjú, director of Erste Bank Hungary’s securities and derivatives branch, told Világgazdaság.
Erste is the third-largest brokerage on the relatively small Budapest Stock Exchange, which last year had a total spot turnover of 6.59 trillion forints (€18.6 billion) last year.
Title image: Budapest Stock Exchange. (source: profitline.hu)