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Wall Street Wrestles With Abrupt Arrival of Juneteenth Law

Bloomberg logoBloomberg 6/18/2021 Mary Biekert and Sonali Basak
a group of people walking in front of a building: Dow Industrial Drops During Thursday Trading As Bond Yields Surge © Photographer: Spencer Platt/Getty Images Dow Industrial Drops During Thursday Trading As Bond Yields Surge

(Bloomberg) -- Wall Street banks and financial exchanges are grappling with how to observe Juneteenth, the June 19 federal holiday signed into law by President Joe Biden Thursday to commemorate the end of slavery in the U.S.

Most government workers will be granted paid time off June 18 as the holiday falls on Saturday this year, but the same won’t be true for the financial markets. Before deciding whether to close, U.S. exchanges -- primarily the New York Stock Exchange and Nasdaq -- rely on input from several participants including banks, broker-dealers and regulators.

The Federal Reserve Board’s offices in Washington will be closed Friday, while its financial services operate normally. The central bank said earlier that it will “determine how to adjust our schedule to reflect the new federal holiday in the years to come.” The Securities and Exchange Commission also said its offices will close.

The Securities Industry & Financial Markets Association, an industry trade group, said it won’t recommend that fixed-income markets close as the Fedwire settlement system will remain open.

Read more: Nasdaq U.S. Markets to Be Open Friday and Monday

Any decision about whether to make Juneteenth a market holiday “will be part of our annual calendar review during which we consult with stakeholders,” Katrina Cavalli, a Sifma spokeswoman, said in an emailed statement. CME Group Inc., the world’s largest futures exchange, will follow Sifma’s lead, a spokeswoman said. The holiday also falls on a weekend in 2022.

There are reasons why the industry may be reluctant to add another market holiday, particularly one that falls between Memorial Day and Independence Day, said Jim Angel, an associate professor specializing in market structure at Georgetown University’s McDonough School of Business.

“People trade a lot more when the market is open, so the industry will lose money by making Juneteenth a holiday,” said Angel, a visiting academic fellow in residence at the National Association of Securities Dealers. “None of the big or small players will like the idea of losing a day’s revenue when the fixed costs stay the same.”

Big banks diverged in their plans for the day. JPMorgan Chase & Co., UBS Group AG and Wells Fargo & Co. all told U.S. employees Thursday that they will add a floating paid holiday to mark the occasion, and JPMorgan and Wells Fargo will add Juneteenth to their regular holiday schedules starting next year. A Morgan Stanley spokeswoman said the firm told employees they can step away from work at midday Friday, urging them to “consider taking time for any activities that are meaningful to you.” Bank of America Corp. and Goldman Sachs Group Inc. didn’t respond to requests for comment.

The legislation to make June 19 a federal holiday had long languished in Congress, but it gained more support after the murder of George Floyd, an unarmed Black man, under the knee of a Minneapolis police officer last year.

Floyd’s death set off a flurry of actions on Wall Street to respond to racial inequality in the country and within its own ranks. Citigroup Inc., for example, told employees in 2020 that they could take an extra paid “Heritage Day” holiday each year on a day of their choosing, in coordination with their managers, including Juneteenth.

Read More: What’s Juneteenth and Why Is It Now a U.S. Holiday?: QuickTake

U.S. markets are sometimes slow to catch up with Congress. While Martin Luther King Jr.’s birthday became a federal holiday in 1983, it took 15 years for the major exchanges to close in observance.

Juneteenth marks the day when enslaved African Americans were ordered to be freed after Union troops arrived in Galveston, Texas, three years after the emancipation proclamation.

Momentum for the holiday built quickly through the week, after the Senate passed the legislation without dissent on Tuesday and the House followed with a 415-14 vote the next day. The law had long been championed by Senator John Cornyn, a Texas Republican, in addition to Democrats.

Cornyn has sponsored a resolution to commemorate Juneteenth every year since 2011. He co-sponsored legislation to make the date a federal holiday last year, but it was blocked by Senator Ron Johnson, a Wisconsin Republican, who objected to the cost of giving federal workers another paid holiday.

(Updates with Wells Fargo, JPMorgan plans in eighth paragraph.)

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