The Swiss stock exchange will extend its trading hours by ten minutes from June 22.
With this, the stock exchange wants to bring some of the over-the-counter trading back to its platform after the closing auction. Dealers are skeptical.
On June 22, a new trading period will be introduced, “trading at the closing price”, the Swiss exchange announced on Tuesday in a letter to the traders. This so-called “Trading-at-last (TAL)” period takes place immediately after the closing auction at 5.30 p.m. and lasts ten minutes.
“We have seen that the importance of the closing auction has increased,” said a SIX spokesman on Wednesday at the request of the AWP news agency. Last year, around a quarter of all stock trading transactions took place at the close of trading. The new function offers traders the opportunity to trade at the closing price if there was insufficient liquidity in the closing auction or if the traders had not participated in the closing auction.
This would mean that traders in the ten-minute period could only execute buy and sell orders at the closing price. There was no more pricing, it said.
The aim is to reduce “off-exchange and over-the-counter activities” – that is, trading that does not run on the stock exchange or takes place after the stock exchange closes – and to bring them together on one platform – the SIX.
For this reason, the publication time for ad hoc announcements will be adjusted accordingly. Because the close of trading only started at 5.40 p.m., the critical trading time was also extended by ten minutes, the regulator of the Swiss stock exchange (SER) announced in a communiqué on Wednesday.
This shifts the publication time for company news with possibly course-relevant content by ten minutes. Ad hoc notices should therefore be published from June 22 before 7.30 a.m. or after 5.40 p.m., the regulatory body continued.
No joy for dealers
Traders interviewed by AWP were cautious about the new trading hours. Although this is an additional way to take advantage of any price deviations in the closing, a trader said. However, he does not therefore expect large volumes.
Another retailer said the importance of the closing auction had increased. “However, the large volume should still be traded in the usual auction.”
Another exchange trader said that the extension of trading hours was more the SIX’s wish for even more sales on its own platform. “In my opinion, the trading hours should not be extended but shortened,” said the trader. This would not increase sales, they would only be spread over even longer trading hours.
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