Introduction to the London Stock Exchange (LSE) and its Proposed Changes
The London Stock Exchange Group (LSEG), which manages the London Stock Exchange, is considering implementing a 24-hour trading schedule due to increasing demand from individual investors who wish to trade outside the regular business hours, as reported by the Financial Times.
Key Factors Driving the Proposed Changes
- Growing Demand from Individual Investors: The rise in individual investors seeking to trade outside traditional market hours has prompted LSEG to explore extending trading hours.
- Technological and Regulatory Aspects: LSEG is evaluating the practical aspects of expanding trading hours, including necessary technology and regulatory implications.
- Impact on Dual-Listed Companies: The proposed changes may affect companies listed on multiple exchanges and their liquidity concentration during opening and closing auctions.
Contextual Background and Industry Trends
LSEG is reportedly “definitely considering” either full 24-hour trading or extended trading hours, according to sources familiar with the matter. The exchange is engaging in significant commercial, political, and regulatory discussions regarding this ongoing topic.
Longer Trading Windows: This trend, initiated in the United States, has become a hot topic among stock exchanges as they strive for modernization, driven by the rise of younger investors trading via smartphones.
Availability of Cryptocurrency Markets: The 24/7 availability of cryptocurrency markets, experiencing increased volumes, has also prompted traditional stock exchanges to consider extending their trading hours.
LSEG’s Current Revenue Sources and Importance of the London Stock Exchange
LSEG’s primary revenue comes from selling financial data to banks, brokers, and other agents. Only 2.7% of its first-quarter 2025 revenue came from equity trading.
Despite this, the London Stock Exchange remains central to the City of London and crucial for international investors accessing British company shares. Its trading hours are currently from 8:00 to 16:30, Monday through Friday.
US Stock Exchanges Seeking Extended Trading Hours
The New York Stock Exchange, Nasdaq, and CBOE Global Markets—which together account for roughly two-fifths of the total US equity trading—have recently requested the Securities and Exchange Commission (SEC) to extend trading hours.
These requests followed the 2024 approval, initially, of 24X, a proposed 24-hour exchange. However, the regulator postponed final authorization for its nighttime operations until significant sector issues are resolved.
European Securities Market Federation’s Stance
In May, the European Securities Market Federation stated that while longer trading windows could benefit retail investment attraction, it remains to be seen if these models are sustainable or beneficial in the long term.
Key Questions and Answers
- What is driving the proposed changes? The growing demand from individual investors trading outside regular hours and the trend of longer trading windows in other markets.
- What are the potential impacts of extended trading hours? Possible effects on dual-listed companies, liquidity concentration, and the sustainability of longer trading windows.
- What is the current state of 24-hour trading in the US? The SEC has approved 24X, a proposed 24-hour exchange, but its nighttime operations authorization is pending resolution of key sector issues.
